Half Year 2026 DocMorris AG Earnings Call

August 19, 2026

Operator: Good morning, ladies and gentlemen, and welcome to DocMorris AG's conference call on the half year results for 2026. This conference is being recorded. At this time, all participants have been placed on a listen only mode. The floor will be open for questions following the presentation. If you would like to ask a question, then you could press star 9 and pound key on your telephone keypad or use the dial in function in the webcast and raise your hand. Let me now turn the floor over to your host, Walter Hess, CEO.

Speaker #3: Good morning, ladies and gentlemen, and welcome to DocMorris Q3 conference call on the half-year results for 2026. This conference is being recorded. At this time, all participants have been placed on listen-only mode.

Speaker #3: The floor will be open for questions following the presentation. If you would like to ask a question, you can press star-9 and the pound key on your telephone keypad, or use the dial-in function in the webcast to raise your hand.

Speaker #3: Let me now turn the floor over to your host, Walter Hess, CEO.

Speaker #4: Yes, thanks a lot. Welcome, everybody, to our H1 2026 results conference call. Today with me is Daniel, our CFO, and I'm Walter Hess, the CEO.

Walter Hess: Yes, thanks a lot. Welcome everybody to our H1 2026 results conference call. Today with me is Daniel, our CFO, and I'm Walter Hess, the CEO. The first half of 2026 has been a milestone period for DocMorris, marked by accelerated growth and an outstanding operational execution. Our focus remains on scaling our integrated digital and AI-driven healthcare platform to deliver long-term profitable value. Today's agenda foresees the highlights of H1 to start with, followed by the business update, financial update, and the outlook before we move to the Q&A session. Let's start with our highlights on slide number 4. We delivered a 38% Rx growth in H1, accelerating further to 46% in Q2, with an even stronger momentum continuing into July and August. Our active customer base expanded by 1.1 million year over year to 12.9 million, with TeleClinic contributing 1.5 million active users.

Speaker #4: The first half of '26 has been a milestone period for DocMorris, marked by accelerated growth and outstanding operational execution. Our focus remains on scaling our integrated digital and AI-driven healthcare platform to deliver long-term, profitable value.

Speaker #4: Today's agenda foresees the highlights of H1 to start with, followed by the business update, financial update, and the outlook, before we then move to the Q&A session.

Speaker #4: Let's start with our highlights on slide number four. We delivered 38% direct growth in H1, accelerating further to 46% in Q2, with even stronger momentum continuing into July and August.

Speaker #4: Our active customer base expanded by 1.1 million year over year to 12.9 million, with TeleClinic contributing 1.5 million active users. Digital services grew 71% in H1, and even 80% in Q2, translating directly into a lower proportionate profit increase due to the high margins.

Walter Hess: Digital services grew 71% in H1 and even 80% in Q2, translating directly into an over proportionate profit increase due to the high margins. The execution of our AI-first strategy is fully on track, expecting a positive earnings contribution in H2 2026 and over CHF 15 million in recurring annual net savings by end of 2027. Therefore, on the back of this strong commercial momentum, we have confidently raised our full year 2026 financial guidance. DocMorris has successfully transitioned into a unique integrated digital and AI health platform serving the 12.9 million active customers. Our high volume online pharmacy remains the core engine, driving the distribution of prescribed medication as well as over-the-counter medication. Our marketplace extends our reach by offering a comprehensive range of health products and health services through trusted partners.

Speaker #4: The execution of our AI-first strategy is fully on track. We expect a positive earnings contribution in H2 2026 and over CHF 15 million in recurring annual net savings by the end of 2027.

Speaker #4: And therefore, on the back of this strong commercial momentum, we have confidently raised our full-year 2026 financial guidance. DocMorris has successfully transitioned into a unique integrated digital and AI health platform, serving its 12.9 million active customers.

Speaker #4: Our high-volume online pharmacy remains the core engine, driving the distribution of prescribed medication as well as over-the-counter medication. Our marketplace extends our reach by offering a comprehensive range of health products and health services through trusted partners.

Walter Hess: TeleClinic, our telemedicine platform, represents a fast-growing, highly scalable take rate business model that delivers attractive margins. We are unlocking additional monetization opportunities through retail media and driving superior customer engagement and conversion with our AI assistant. Let's move to the assistant on the next slide. We have successfully completed the full rollout of our AI health and shopping assistant across the entire DocMorris desktop, mobile website, and app. The assistant is experiencing a fast adoption, with monthly engaged users and total sessions growing very rapidly. Crucially, we are seeing that the AI assistant users demonstrate significantly stronger platform interactions and higher conversion rates. This conversational interface is a critical differentiator, helping customers manage their health, including prescriptions, find products, and receive health advice. We are continuously further deploying new features and value-added services to further enhance retention and customer lifetime value on our platform. Let's move to Rx now.

Speaker #4: TeleClinic, our telemedicine platform, represents a fast-growing, highly scalable take-rate business model that delivers attractive margins. We are unlocking additional monetization opportunities through retail media and driving superior customer engagement and conversion with our AI assistant.

Speaker #4: Let's move to the AI assistant on the next slide. We have successfully completed the full rollout of our AI health and shopping assistant across the entire DocMorris desktop, mobile website, and app.

Speaker #4: The assistant is experiencing rapid adoption, with monthly engaged users and total sessions growing very quickly. Crucially, we are seeing that AI assistant users demonstrate significantly stronger platform interactions and higher conversion rates.

Speaker #4: This conversational interface is a critical differentiator, helping customers manage their health—including prescriptions—find products, and receive health advice. We are continuously deploying new features and value-added services to further enhance retention and customer lifetime value on our platform.

Speaker #4: Let's move to our Rx now. Our Rx revenue reached a record of €86.9 million in Q2 2026, representing a doubling compared to the year Rx started in Q2 2024.

Walter Hess: Our Rx revenue reached a record of EUR 86.9 million in Q2 2026, representing a doubling compared to the eRx start in Q2 2024. This represents a Q2 year-over-year revenue growth of 45.8%, showcasing the speed of eRx adoption. The sequential growth of 17.2%, equal to EUR 12.6 million from Q1 to Q2, reflects a strong momentum that is even further accelerating into the third quarter. Active Rx customers grew by 15.6% year over year in Q2, with also strong sequential acceleration of 7.1% quarter over quarter. We are highly encouraged by these trends, which confirm that DocMorris is a primary destination for digital prescription redemptions. The eRx redemption via digital channels are driving unprecedented customer loyalty, with latest eRx cohorts showing structurally superior retention and order frequency. Latest cohorts are 4.5 times more loyal than legacy paper Rx cohorts, and two times more loyal than our first eRx cohorts.

Speaker #4: This represents a Q2 year-over-year revenue growth of 45.8%, showcasing the speed of Year X adoption. The sequential growth of 17.2%, equal to €12.6 million from Q1 to Q2, reflects strong momentum that is even further accelerating into the third quarter.

Speaker #4: Active Rx customers grew by 15.6% year over year in Q2, with a strong sequential acceleration of 7.1% quarter over quarter. We are highly encouraged by these trends, which confirm that DocMorris is a primary destination for digital prescription redemptions.

Speaker #4: The ERX redemption via digital channels is driving unprecedented customer loyalty, with the latest ERX cohorts showing structurally superior retention and order frequency. Latest cohorts are 4.5 times more loyal than legacy paper Rx cohorts, and twice as loyal as our first ERX cohorts.

Speaker #4: Also, our average order value for Rx increased significantly to €120 in Q2 26, coming from €119 one year ago. On the next slide.

Walter Hess: Also, our average order value for Rx increased significantly to EUR 120 in Q2 2026, coming from EUR 119 one year ago. On the next slide, Rx customers generate over 10x the revenue of OTC customers, which also translate into significantly higher customer lifetime value. This is why we are prioritizing the acquisition of new Rx customers over new OTC customers. Simultaneously, we have achieved a step-up function reduction in customer acquisition costs, as you can see on this slide, and marketing spend since Q4 2025. This reduction was driven by the removal of high-cost traditional TV ads and out-of-home campaigns, and the shift towards efficient digital channels in combination with the exemption of co-payments. The additional costs from co-payment exemptions compared to the previous bonus model are relatively small and much more than offset by the savings in the marketing expenses.

Speaker #4: Rx customers generate over 10 times the revenue of OTC customers, which also translates into significantly higher customer lifetime value. This is why we are prioritizing the acquisition of new Rx customers over new OTC customers.

Speaker #4: Simultaneously, we have achieved a step-change reduction in customer acquisition costs, as you can see on this slide, and in marketing spend since Q4 2025.

Speaker #4: This reduction was driven by the removal of high-cost traditional TV ads and out-of-home campaigns, and the shift towards efficient digital channels, in combination with the exemption of co-payments.

Speaker #4: The additional costs from co-payment exemptions compared to the previous bonus model are relatively small, and are more than offset by the savings in the marketing expenses.

Walter Hess: On slide number 10, you will find an update on the regulatory and pharmacy reform topics. The completed German pharmacy reform provides full regulatory and policy clarity, introducing a step-by-step increase in fixed remuneration per medication from EUR 8.35 to EUR 9, already in place since 1 July this year, and rising further to EUR 9.50 in January 2027. This is accompanied by an increase in the statutory pharmacy discount, which rises to EUR 2.07 in 2027. Under the newly passed GKV-Finanzstabilisierungsgesetz, patient co-payments will rise by 50% in 2027 to a range of EUR 7.50 to EUR 15, which will further increase, and already does, price sensitivity among publicly insured patients.

Speaker #4: On slide number 10, you will find an update on the regulatory and pharmacy reform topics. The completed German pharmacy reform provides full regulatory and policy clarity.

Speaker #4: Introducing a step-by-step increase in fixed remuneration per medication from 8 euro 35 to 9 euro, already in place, since 1st of July, this year, and rising further to 9 euro 50 in January 27.

Speaker #4: This is accompanied by an increase in the statutory pharmacy discount, which rises to 2 euro 07 in 27. Under the newly passed GKV financial reform, patient co-payments will rise by 50% in 27 to a range of 7 euro 50 to 15 euros.

Speaker #4: Which will further increase—and already does—in price sensitivity among publicly insured patients. While there is a lot of discussion and talk regarding our co-payment exemption, we just want to clarify and underline that European and national courts have fully reconfirmed the legality of our Rx bonuses, establishing that our co-payment coverage preserves the principles of statutory health insurance, without creating any medical disincentives.

Walter Hess: While there is a lot of discussions and talk regarding our co-payment exemption, we just want to clarify and underline that European and national courts have fully reconfirmed the legality of our Rx bonuses, establishing that our co-payment coverage preserves principles of statutory health insurance without creating any medical disincentives. Let us move to the non-Rx business now. Our non-Rx segment continues to provide a solid recurring revenue stream, growing 6.6% in H1 2026 to reach EUR 486 million. OTC and BPC products grew by 4% in H1, with growth being actively calibrated by us towards attracting higher margin Rx customers, as shown before on the slide for Rx. We are intentionally managing OTC volumes to focus on margin preservation and profitability rather than low-margin discount volumes. Digital services, including TeleClinic retail media and our marketplace, grew by a significant 71% in H1 and 80% in Q2.

Speaker #4: Let's move to the non-Rx business now. Our non-Rx segment continues to provide a solid recurring revenue stream, growing 6.6% in H1 '26 to reach €486 million.

Speaker #4: OTC and PPC products grew by 4% in H1, with growth being actively calibrated by us towards attracting higher-margin RX customers, as shown before on the slide for RX.

Speaker #4: We are intentionally managing OTC volumes to focus on margin preservation and profitability, rather than low-margin discount volumes. Digital services, including teleclinic retail media and our marketplace, grew by a significant 71% in H1 and 80% in Q2.

Walter Hess: The rapid expansion of high-margin digital services is also successfully shifting the overall group margin upwards. So let us come now to an update about TeleClinic on slide number 12. The revenue of TeleClinic grew by 48% to EUR 17.6 million in H1 2026, driven by increased treatment volumes of 51% year over year to 1.3 million, and supported by a further growing number of doctors on the platform who also continuously increase their utilization rates. EBITDA doubled compared to H1 2025, underscoring the powerful operational leverage and inherent scalability of our telemedicine business model. TeleClinic is in addition maintaining a strong pipeline of new healthcare and insurance partnerships, significantly broadening our strategic reach across the entire healthcare landscape. In addition, they have successfully launched an AI-powered doctor appointment booking system, introducing an additional highly scalable pay-per-booking model.

Speaker #4: The rapid expansion of high-margin digital services is also successfully shifting the overall group margin upwards. So, let us come now to an update about TeleClinic on slide number 12.

Speaker #4: The revenue of TeleClinic grew by 48% to €17.6 million in H1 2026, driven by increased treatment volumes, which rose 51% year-over-year to 1.3 million, and supported by a further growing number of doctors on the platform, who also continuously increase their utilization rates.

Speaker #4: EBITDA doubled compared to H1 '25, underscoring the powerful operational leverage and inherent scalability of our telemedicine business model. TeleClinic is, in addition, maintaining a strong pipeline of new healthcare and insurance partnerships, significantly broadening our strategic reach across the entire healthcare landscape.

Speaker #4: In addition, they have successfully launched an AI-powered doctor appointment booking system, introducing a highly scalable pay-per-booking model. Last but not least, in the business update, our retail media platform.

Walter Hess: Last but not least in the business update, our retail media platform. GMR advertising has established itself as the undisputed number one healthcare ad network in Germany. In H1 2026, GMR achieved the first time over EUR 10 million in net sales, representing a strong year-over-year growth rate of far more than 100%. This business operates at very high profitability, delivering a robust mid-double-digit EBITDA margin directly to our bottom line. To mention is that during the soccer World Cup, we ran high impact campaigns across digital TV channels, generating over 250 million highly measurable ad impressions. DocMorris also benefited significantly from this, achieving highly attractive ROAS, return on advertising spend, through precise targeting, which allowed us to maximize awareness for Rx redemption with co-payment exemption.

Speaker #4: DRM Advertising has established itself as the undisputed number one healthcare ad network in Germany. In H1 '26, DRM achieved, for the first time, over €10 million in net sales, representing a strong year-over-year growth rate of far more than 100%.

Speaker #4: This business operates at very high profitability, delivering a robust mid–double-digit EBITDA margin directly to our bottom line. To mention is that during the Soccer World Cup, we ran high-impact campaigns across digital TV channels, generating over 250 million highly measurable ad impressions.

Speaker #4: DocMorris also benefited significantly from this, achieving highly attractive ROAS—return on advertising spend—through precise targeting, which allowed us to maximize awareness for Rx redemption with co-payment exemption.

Speaker #4: And coincidentally, this happened exactly at the time the regulator decided to increase co-payments starting from 27, making this a widely discussed topic in Germany.

Walter Hess: And coincidentally, this happened exactly with the time the regulator decided to increase co-payments starting from 2027, making this a widely discussed topic in Germany. In total, we expect this highly profitable, data-driven ad engine to remain a major growth and margin lever for DocMorris in the coming years. With that, I would like to hand over to my colleague, Daniel, now for the financial update and the outlook.

Speaker #4: In total, we expect this highly profitable, data-driven ad engine to remain a major growth and margin lever for DocMorris in the coming years. And with that, I would like to hand over to my colleague Daniel now for the financial update and the outlook.

Speaker #2: Thank you, Walter, and also from my end, a very warm welcome to everyone on the call. It's my pleasure to present to you the numbers of our first half-year performance, and then follow up with the updated guidance for 2026.

Daniel Wüest: Thank you, Walter. Also from my end, a very warm welcome to everyone on the call. It is my pleasure to present you the numbers of our H1 performance, then followed up by the updated guidance for 2026. If we move to the first slide, which should be known to you, even if there is an addition, because you have added the operating cash flow since I will come later to that. Let us start with the top line. Revenue delivered double-digit growth of 13.4% in local currency and 10.7% in Swiss francs. While external revenue grew a little bit less, with 12.5% in local currency and 9.8% in Swiss francs. The growth was driven by Rx, with a healthy growth of close to 40%, exactly 38.3%, and digital services with a growth of over 70% revenue increase year-over-year.

Speaker #2: If we move to the first slide, which should be known to you, even if there's an addition—because you have added the operating cash flow—and I will come later to that.

Speaker #2: But let's start with the top line. Revenue delivered double-digit growth of 13.4% in local currency and 10.7% in Swiss francs, while external revenue grew a little bit less at 12.5% in local currency and 9.8% in Swiss francs.

Speaker #2: The growth was driven by Rx, with a healthy increase of close to 40%, specifically 38.3%, and digital services, which grew by over 70%.

Speaker #2: Revenue increase year over year. On the gross margin, gross margin remained more or less stable despite a negative impact due to the co-payments. And this negative impact is approximately in the first half year was approximately 50 basis points and therefore the stable gross margin is even more a very good achievement, which can come also from digital services which contributed due to the high sales growth relatively more to the top line gross margin.

Daniel Wüest: On the gross margin, gross margin remained more or less stable despite a negative impact due to the co-payments. This negative impact in the H1 was approximately 50 basis points. Therefore, the stable gross margin is even more a very good achievement, which comes also from digital services, which contributed due to the high sales growth, relatively more to the top line gross margin. It is also important to say that this roughly 15 basis points negative impact of the co-payments from the Rx side are more than overcompensated at the bottom line on an EBITDA level at the end of the day. Adjusted EBITDA margin expanded strongly by 350 basis points to -1.8% year-over-year. As mentioned, we have added operating cash flow, which also showed a very remarkable development.

Speaker #2: It's also important to say that this roughly 15 basis points negative impact of the co-payments from the Rx side is more than overcompensated at the bottom line on an EBITDA level at the end of the day.

Speaker #2: Adjusted EBITDA margin expanded strongly by 350 basis points to minus 1.8% year over year. As mentioned, we have added operating cash flow, which also showed a very remarkable development.

Speaker #2: The operating cash flow improved by almost 35 million Swiss francs to now minus 21.1 million in the first half of '26. This does not go to the KPIs; also here, a very friendly or very nice picture and development.

Daniel Wüest: The operating cash flow improved by almost CHF 35 million to now, -21.1 million in the H1 2026. With that, let us go to the KPIs. Also here, a very friendly or very nice picture and development. As you can see, customer acquisition accelerated across our business units, mainly in Rx, OTC, but also very strongly in TeleClinic, with 1.1 million new customers year-over-year, bringing the total of active customers to roughly 13 million. In the H1, the share of new Rx customers increased significantly, and that is very important. Whereof the majority were new eRx customers besides a minority of OTC and also paper Rx customers which have become eRx customers. These are the so-called switchers. Active TeleClinic customers grew to 1.5 million by the end of the semester. Let us move to the average order value, which also developed very nicely.

Speaker #2: As you can see, customer acquisition accelerated across our business units—mainly in Rx and OTC, but also very strongly in TeleClinic, with 1.1 million new customers year over year.

Speaker #2: Bringing the total of active customers to roughly 13 million. In the first half of the year, the share of new Rx customers increased significantly, and that's very important, whereof the majority were new eRx customers, besides a minority of OTC and also paper Rx customers which switched to, which have become eRx customers.

Speaker #2: These are the so-called switchers. Active teleclinic customers grew to 1.5 million by the end of the semester. Let's move to the average order value, which also developed very nicely. We saw there an increase from €97 to €101.

Daniel Wüest: We saw there an increase from 97 to EUR 101. Please bear in mind that that is an average number, and we have clearly seen a further increase by the end of the H1. OTC, very stable over the last periods. They stayed at EUR 33. If we look at the order frequency, which is also an important KPI, we see that Rx, an ongoing further increase to 4.1 times, while OTC also remains stable at 2 times. Repeat order rate, you could argue or in the first instance think that is with a slight decline, that that is a bad trend, but it is quite the opposite, given the high share of new Rx customers by definition than the repeat orders, because the new cohorts, they all asset the new and could not be in a position to reorder.

Speaker #2: Please bear in mind that that's an average number, and we have clearly seen a further increase by the end of the half year.

Speaker #2: OTC has been very stable over the last period; they stayed at €33. If we look at the order frequency, which is also an important KPI, we see that Rx shows an ongoing further increase to 4.1 times, while OTC also remains stable at 2 times.

Speaker #2: Repeat order rate—you could argue, or at first think, that that's kind of a slight decline, that that's a bad trend, but it's quite the opposite.

Speaker #2: Given the high share of new Rx customers by definition then the repeat orders because the new cohorts they are asset the new and could not be in a position to reorder and that's the reason why if you would kind of level it out the repeat order rate would stay at the very high level of high 70s percent.

Daniel Wüest: That is the reason why, if you would level it out, the repeat order rate would stay at the very high level of high 70s percent. Let me conclude on this slide as follows. The KPIs clearly underline the high-value contribution of our new Rx customers, which basically came in as of March of this year, and translating into increased average order values, higher order frequency, and stable repeat order rates. This is a very good basis for the future and the future business, which we can do with these clients. Let us have a deep dive into the P&L. As said, on top line, the revenue growth of 13.4% clearly exceeded our initial expectations, and as mentioned, mainly driven by Rx and digital services.

Speaker #2: Let me conclude on this slide as follows: The KPIs clearly underline the high value contribution of our new Rx customers, which basically came in as of March of this year.

Speaker #2: And translating into increased average order values, higher order frequency, and stable repeat order rates, which is a very good basis for the future and the future business we can do with these clients.

Speaker #2: Let's have a deep dive into the P&L. As said, on the top line, the revenue growth of 13.4% clearly exceeded our initial expectations and, as mentioned, was mainly driven by Rx and digital services.

Speaker #2: The good thing is that we really, we had to prove that the operational leverage does work and, as you have seen, despite the substantial growth, the personnel expense ratio improved by 80 basis points. The marketing efficiency even translated into a 310 basis point improvement of the marketing efficiency ratio, and that was kind of backed by a €14 million decrease in marketing expenses year over year.

Daniel Wüest: The good thing is that we had the proof that the operational leverage does work, and as you have seen, despite the substantial growth, personal expense ratio improved by 80 basis points. The marketing efficiency even translated into 310 basis points improvement of the marketing efficiency ratio, and that was backed by a EUR 14 million decrease in marketing expenses year over year. Even distribution expenses, which everyone would expect to increase given that the high fuel prices, we could lower them by 10 basis points, and that just shows that we are there, had tailwind from our operational leverage, which we have built on. Adjusted EBITDA improved substantially by almost EUR 18 million year over year. While reported EBITDA improved by EUR 7.1 million. But of course, their substantial one-off costs of EUR 9.1 million have to be taken into account here. These EUR 9.1 million adjustments, where do they come from?

Speaker #2: And even distribution expenses, which everyone would expect to increase given the high fuel prices, we could lower them by 10 basis points. And that just shows that we have the kind of tailwind from our operational leverage which we have built on.

Speaker #2: Adjusted EBITDA improved substantially by almost €18 million year over year on the reported, while reported EBITDA improved by €7.1 million. But, of course, there are substantial one-off costs of €9.1 million that have to be taken into account here.

Speaker #2: This €9.1 million adjustment—where does it come from? In the first half of the year, we recorded a total of €7.6 million in restructuring costs, which were caused by two projects.

Daniel Wüest: In the H1, we recorded a total of EUR 7.6 million of restructure costs, which were caused by 2 projects. First of all, the closure of the Ludwigshafen warehouse by the end of March of this year. Secondly, the bigger part of our communicated AI-first strategy in June, which summed up both together of at EUR 7.6 million restructuring costs. The finance result looks also, on the first view, not a little bit ugly, but keep in mind, and that is also written in the half-year report, that almost EUR 5 million out of the EUR 10.6 million are FX related, and as usual, non-cash. It is not a non-cash, has no non-cash impact. Why?

Speaker #2: First of all the closure of the Ludwigshafen warehouse in the by the end of March of this year and then secondly the the bigger part of our communicated AI first strategy in June which summed up both together of at 7.6 million restructuring costs.

Speaker #2: At the finance result looks also on the first view not a little bit ugly but keep in mind and that's also written in the in the half year report that almost 5 million out of the 10.6 million are FX related and as usual non-cash it's not a non-cash has no non-cash impact why the reason is that that's the kind of the the FX impact which we occur on our intercompany loans given that we our company is in Swiss francs and intercompany loans are on euro and given the weakening euro that results then always in a non-cash FX loss.

Daniel Wüest: The reason is that is the FX impact which we occur on our intercompany loans, given that our funding is in Swiss francs and intercompany loans are on euro, and given the weakening euro, that results then always in a non-cash FX loss. Also even not mentioned here on the table because it is a small position, but just to take that off the table, interest expense, excuse me, taxes, have increased by EUR 1 million. I think to pay taxes, that is never, ever something which is appreciated. But on the other hand, that just shows that we have already some entities which are generating net profit and revenue. The reason is that we are talking about TeleClinic, which has to pay, since last year, taxes. Of course, there are a lot of huge tax loss carry forward in Germany.

Speaker #2: Also even not mentioned here on on the table because it's it's a small position but just to take that off the table interest rates interest expense excuse me taxes have increased by 1 million I think tax to pay taxes that's never ever something which is appreciated but on the other hand that just shows that we have already some entities which are generating net profit and and revenue and the reason is that we are talking about teleclinic which have has to pay since last year taxes of course there are a lot of huge tax tax loss carry forward in Germany but these bear in mind that different to Switzerland where you can can it cover with 100% in Germany it's a 60/40 ratio and that's the reason why always 40% of taxes you have to pay but with the benefit that this tax loss carry forward are lasting forever while in Switzerland they will fall apart often nine years.

Daniel Wüest: Please bear in mind that different to Switzerland, where you can cover this 100%, in Germany, it is a 60/40 ratio, and that is the reason why always 40% of taxes you have to pay. But with the benefit that this tax loss carry forwards are lasting forever, while in Switzerland, they will fall apart after 9 years. On the next slide, a quick look at the balance sheet. I think most mentioned, the most important thing to mention is our strong liquidity position of almost CHF 100 million, which provides us with a comfortable liquidity buffer, to reach free cash flow break even in the course of 2027 and beyond. Also worthwhile to mention are the receivables, which increased substantially. I think part of it is due to the high growth and the higher share of the Rx in revenues.

Speaker #2: On the next slide, quick look at the balance sheet. I think the most important thing to mention is our strong liquidity position of almost €100 million, which provides us with a comfortable liquidity buffer to reach free cash flow break-even in the course of '27 and beyond.

Speaker #2: Also worthwhile to mention are the receivables which increased substantially. I think part of it is due to that the high growth and the higher share of the Rx of Rx on in revenues as you know Rx has the accounts receivables are almost one month 20 to 25 days while on the OTC you even have kind of a negative networking capital because you you pay your suppliers once you have already received the cash from your customers and this has kind of an impact of roughly 8 million in the first half and the others impacts were one of effects which won't occur going forward.

Daniel Wüest: As you know, Rx has the accounts receivables, or almost 1 month, 20 to 25 days, while on the OTC, you even have negative networking capital because you pay your suppliers once you have already received the cash from your customers. This has an impact of roughly EUR 8 million in the H1, and the others impacts were one-off effects which will not occur going forward. Net debt increased by EUR 36 million to EUR 174 million, while the group balance sheet remains very solid with a healthy equity ratio of 46%. Overall, financial flexibility remains well-aligned with our medium-term operational roadmap. The next slide should also be known to you. The 2 metrics, the indirect cost ratio and the net working capital. Overall, our indirect cost ratio improved by 20 basis points year-over-year.

Speaker #2: Net debt increased by €36 million to €174 million, while the group balance sheet remains very solid, with a healthy equity ratio of 46%. Overall, financial flexibility remains well aligned with our medium-term operational roadmap.

Speaker #2: The next slide should also be known to you. The two metrics are the indirect costs ratio and the net working capital. Overall, our indirect cost ratio improved by 20 basis points year over year.

Daniel Wüest: Very remarkable is that in the online pharmacy, meaning OTC, Rx, the indirect cost ratio could substantially being reduced, being on absolute but also relative levels, while on our digital services, we made some investments into the fast-growing platform to cope with the fast growth of especially TeleClinic and retail media. Worthwhile to mention is that the implementation of our AI-first strategy will have an additional positive impact on our indirect costs, which is not yet reflected here, and that will happen over the next 18 months as an additional pattern to the ordinary course of business, indirect cost management. The net working capital on the right-hand chart expanded by 40 basis points year-over-year, which means, as I said, mainly driven by the higher share of Rx revenues, which has an increase of the accounts receivables as a consequence.

Speaker #2: Very remarkable is that in the online pharmacy meaning OTC Rx the indirect cost ratio could substantially being reduced being on absolute but also relative levels while on our digital services we made some investments into the platform the fast growing platform to cope with the fast growing the fast growth of especially teleclinic and retail media.

Speaker #2: Worthwhile to mention is that the implementation of our AI-first strategy will have an additional positive impact on our indirect costs, which is all not yet reflected here and thus will happen over the next 18 months, as an additional pattern to the order course of business indirect cost management.

Speaker #2: The networking capital on the right hand in the right hand chart expanded by 40 basis points year over year which means as I said mainly driven by the higher share of Rx revenues which has kind of an increase of the accounts receivable as a consequence and I mentioned the negative impact on the network capital is roughly 8 million Swiss francs.

Daniel Wüest: I mentioned the negative impact on the net working capital is roughly EUR 8 million. Having said this, we are maintaining active working capital management to optimize ratios as Rx revenues will further scale. Let's have a quick look at our AI-first strategy. As you know, we have, by the end of June, announced our AI-first strategy, and we are very pleased to communicate at this point in time that we are fully on track to capture above EUR 15 million of recurring savings, fully phased in by the end of 2027. All savings will directly translate into free cash flow with roughly 75% hitting also the EBITDA level. The balance, the 25% balance, being lower tech development costs, which is a huge, substantial part of the AI-first strategy, which you know are capitalized and therefore have a cash impact but not an impact on EBITDA.

Speaker #2: Having said this we are maintaining active working capital management to optimize ratios as revenue as Rx revenues will further scale let's have a quick look at our AI first strategy as you know we have by the end of June announced our AI first strategy and we are very pleased to communicate at this point in time that we are fully on track to capture this the 15 above 15 million of recurring savings fully faced in by the end of 27.

Speaker #2: All savings will directly translate into free cash flow with roughly 75% hitting also the EBITDA level the balance the 25% balance being lower tech development costs which is a huge substantial part of the AI first strategy which you know are capitalized and therefore are kind of have a cash impact but not an impact on EBITDA and that's the reason why the cash impact is higher than the impact on the EBITDA level.

Daniel Wüest: That's the reason why the cash impact is higher than the impact on the EBITDA level. In the course of the announcement, we have executed the layoff of the people, and we have, at this point in time, dismissed over 100 FTEs, which was, as announced, the plan, and that has now been fully executed. By the end of 2027, we assume annual CapEx savings of over EUR 5 million. That's also mainly in the tech area, where we need much less coders, given that the AI tools can do that by themselves much faster and at equal efficiency or even higher efficiency, but also quality level. As a consequence, we have lowered our CapEx guidance for 2026, which was around EUR 30 million, to below EUR 30 million.

Speaker #2: In the course of the announcement, we have executed the layoff of the people, and we have, at this point in time, dismissed over 100 FTs, which was kind of as announced the plan, and that has now been fully executed.

Speaker #2: By the end of '27, we assume annual capex savings of over €5 million. That's also mainly in the tech area, where we need much fewer coders, given that the AI tools can do that by themselves much faster and at equal efficiency or even higher efficiency, and at the same kind of quality level.

Speaker #2: As a consequence, we have lowered our capex guidance for 2026, which was around €30 million, to below €30 million. The one-time restructuring expenses of €4.3 million in relation to the AI-first strategy, which we have booked in Q2, will be largely offset in the second half of 2026, given the kind of savings which we can already realize in the second half of this year.

Daniel Wüest: The one-time restructuring expenses of EUR 4.3 million in relation to the AI-first strategy, which we have booked in Q2, will be largely offset in H2 2026, given with the savings, which we can already realize in H2 of this year. Now let's move to the second part of the presentation, to the update of the guidance and especially to the overarching targets of this year to achieve EBITDA break-even in the course of 2026. Also a chart which should be common to you or known to you. We have added the Q2 EBITDA performance of -EUR 4.6 million and also refined the current quarters. Funnily, it's more or less exactly the same figures. We had not do any bigger deviations, therefore, that shows that the planning wasn't that bad at this end.

Speaker #2: Now let's move to the second part of the of the presentation to the update update of the guidance and especially to the overarching targets of this year to achieve EBITDA a break even in the course of 26.

Speaker #2: Also kind of a chart which should be common to you or known to you we have added the Q2 EBITDA performance of minus 4.6 million and also refined the the common quarters funnily it's more or less exactly the same figures we had not do any bigger deviation therefore that shows that the planning wasn't that bad on at this end but having said this we are even more comfortable that we will reach the EBITDA break even you see that the dark green that's basically the the midpoint kind of the let's say the the safe side and then we have some deviation on to the to the low end and and the top end and it's clear that Q4 will be EBITDA positive and on Q3 we are working to get close to already being EBITDA positive.

Daniel Wüest: Having said this, we are even more comfortable that we will reach the EBITDA break-even. You see that the dark green, that's basically the midpoint, the, let's say, the safe side, and then we have some deviation on to the low end and the top end. It's clear that Q4 will be EBITDA positive, and on Q3, we are working to get close to already being EBITDA positive. Where is our confidence coming from? I think, first of all, the achievements which we realized in H1, but then also very important, the few weeks since then and up to today, show the continuation of the strong trends which we have seen in Q2, and even despite holiday season, some further acceleration, and that's where our confidence is coming from. Then thinking already into 2027, where the next milestone is to achieve the cash flow break-even.

Speaker #2: Wide worries, our confidence is coming from, I think, first of all, the achievements which we realized in the first half. But then also, very important, the few weeks since then and up to today show the continuation of the strong trends which we have seen in Q2, and even despite the holiday season, some further acceleration. And that's why our confidence is coming from.

Speaker #2: Then thinking already into 2027 where the next milestone is to achieve free cash flow break even we have and well knowing that operating cash flow is not it does not equal free cash flow but just to show it's the it's a it's a starting point to to come to free cash flow the operating cash flow development there you you see a remarkable development year over year coming from almost minus 56 million to minus 33 in the second half last year to minus 21 million and also there will be the same trend will be ongoing so that we will have a very good and strong starting base into 27 to tackle then the free cash flow break even in the course of the year 27.

Daniel Wüest: Well, knowing that operating cash flow does not equal free cash flow, just to show it is the starting point to come to free cash flow. The operating cash flow development, there you see a remarkable development year-over-year coming from almost -56 million to -33 million in the H2 last year to -21 million. Also the same trend will be ongoing, so that we will have a very good and strong starting base into 2027 to tackle the free cash flow break-even in the course of the year 2027. Where are these operating cash flow improvements coming from? First of all, clearly, the EBITDA improvement, but then also driven by lower interest expenses, which helps there to drive the operational cash flow.

Speaker #2: Where does this EBITDA operating cash flow improvement come from? First of all, clearly from the EBITDA improvement, but then also driven by lower interest expenses, which helps to drive the operational cash flow.

Daniel Wüest: With that, let us come to the slide with the official guidance. I provide you also the soft guidance accompanying the hard guidance, which you also can find in our media release of this morning. On the three metrics we put forward in March when we guided for the financial year 2026. Top line, here we are talking external revenues. We guided mid-single digits to low teens, which is somewhere in the area of 3% to 12% in our interpretation. We now narrowed and increased the range to 9% to 13%, coming from 12.5% by the end of the H1.

Speaker #2: With that, let's come to the slide with the official guidance, and I provide you also the soft guidance accompanying the hard guidance, which you also can find in our media release of this morning on the three metrics we put forward in March when we guided for the financial year '26.

Speaker #2: Top line, and here we are talking external revenues. We guided mid single digit to low teens, which is somewhere in the area of 3% to 12% in our interpretation. And we have now narrowed and increased the range to 9% to 13%, coming from 12.5% by the end of the first half of the year.

Daniel Wüest: Adjusted EBITDA, we also substantially narrowed down the range from -10 million to -25 million, to -10 million to -17.5 million, which implies at the best end, basically, a positive EBITDA for the H2, but clearly skewed towards still slightly negative EBITDA for the H2, if you put the -10.9 million EBITDA for the H1 into this range. CapEx, I already mentioned, we lowered from around 30 million, which was rather 30 million plus, now to below 30 million. I think that also will be something which will stay and will have a positive impact going forward. As mentioned, of course, we reconfirm EBITDA break-even in the course of 2026 and free cash flow break-even in the course of 2027. Also, our midterm targets remain unchanged, with roughly 15% revenue growth, 8% EBITDA margin, and roughly 30 million CapEx per year.

Speaker #2: Adjusted EBITDA—we also substantially narrowed down the range from minus $10 million to minus $25 million, to minus $10 million to minus $17.5 million—which implies at the best end basically kind of a positive EBITDA for the second half, but clearly skewed towards kind of a still slightly negative EBITDA for the second half if you kind of put the minus $10.9 million EBITDA for the first half into this range.

Speaker #2: Capex, I already mentioned, we lowered from around 30—which was kind of, rather 30 plus—now to below €30 million, and I think that also will be something which will stay and will have a positive impact going forward.

Speaker #2: As mentioned of course we reconfirm EBITDA break even in the course of 26 and free cash flow break even in the course of 27 and also our midterm targets remain unchanged with roughly 15% revenue growth 8% EBITDA margin and roughly 30 million capex per year but you have heard my comments in relation to to capex and we will close to have a close look at it when we look at the midterm guidance the next time.

Daniel Wüest: But you have heard my comments in relation to CapEx, and we will have a close look at it when we look at the midterm guidance the next time. Very important that the soft guidance to the top-line growth of 9% to 13%. Basically, the same patterns which we provided to you in March. The Rx has developed much more in favor than we thought, and is still developing very strongly. That is the reason why we raised the soft guidance from around 20% growth to around 40% growth, which is already underlined with Q2, with over 40% quarterly growth. On the OTC, we keep the soft guidance with mid-single digit, based on the comments Walter made, that we are really managing profitability and customer quality. Digital services, we guided before softly mid double digit, which translated at this time to 40% to 60%.

Speaker #2: On very important the soft guidance to the to the top line growth of 9 to 13% basically the same patterns which we provided to you on in March the RX has developed much more in favor then than we thought and is still developing very strongly that's the reason why we raised the soft guidance from around 20% growth to around 40% growth which is already underlined with the Q2 with the over 40% quarterly growth on OTC we keep the soft guidance with mid single digit based on the comments Walter made that we are really kind of managing profitability and customer quality and digital services we guided before softly kind of mid double digit which translates translated at this time to 40 to 60% and now we specify to digital services will grow above 50%.

Daniel Wüest: And now we specify to digital services will grow above 50%. With that, thank you very much for your attention. Back to Walter or the team for the coming Q&A.

Speaker #2: And with that, thank you very much for your attention. And back to Walter or the team for the coming Q&A.

Speaker #1: Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press star-9 and the pound key on your telephone keypad.

Operator: Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press star 9 and pound key on your telephone keypad. If you would like to revoke your question, press star 3 and pound key. You can also use the dial-in function in the webcast and raise your hand if you would like to ask a question by phone. We already have a few questions in the queue. The first one goes to Jan Koch from Deutsche Bank. Please go ahead.

Speaker #1: If you would like to revoke your question, press star 3 and the pound key. You can also use the dial-in function in the webcast and raise your hand if you would like to ask a question by phone.

Speaker #1: We already have a few questions in the queue. The first one goes to Jan Koch from Deutsche Bank. Please go ahead.

Speaker #2: Good morning. Thanks for taking my questions. I have three, if I may, and I would like to take them one by one, if possible.

Jan Koch: Good morning. Thanks for taking my questions. I have 3, if I may, and I would like to take them one by one if possible. The first question is on your Rx strategy, which seems to be paying off. How much did you spend in H1 to cover co-payments? It also appears that you plan to cover the increased co-payments next year. How do you ensure that this does not result in loss-making orders? For how long do you plan to cover the full co-payment?

Speaker #2: The first question is on your RX strategy, which seems to be paying off. How much did you spend in H1 to cover co-payments? And it also appears that you plan to cover the increased co-payments next year.

Speaker #2: How do you ensure that this does not result in loss-making orders, and for how long do you plan to cover the full co-payment?

Speaker #3: Yeah. Thank you, Jan, for this question that everybody is raising who talks to us. So, as I have explained before, the step from the bonus model before to the co-payment is relatively small.

Daniel Wüest: Yeah. Thank you, Jan, for this question that everybody is raising who talks to us. As I have explained before, the step from the bonus model before to the co-payment is relatively small. It is not a big traditional step on what we have to spend there, whereas the optimization of the marketing spend is much, much bigger. Therefore, the approach we have chosen is a very economically reasonable approach, and it shows month by month. On one hand, with the growth, but also on the other hand, with the results that we had with the Rx growth, that this is really, for us, the right and the good strategy. Regarding the we have never told to the market that we are going to take over the full co-payment for the whole market, for everything in next year.

Walter Hess: Yeah. Thank you, Jan, for this question that everybody is raising who talks to us. As I have explained before, the step from the bonus model before to the co-payment is relatively small. It is not a big traditional step on what we have to spend there, whereas the optimization of the marketing spend is much, much bigger. Therefore, the approach we have chosen is a very economically reasonable approach, and it shows month by month. On one hand, with the growth, but also on the other hand, with the results that we had with the Rx growth, that this is really, for us, the right and the good strategy. Regarding the we have never told to the market that we are going to take over the full co-payment for the whole market, for everything in next year.

Speaker #3: So, it's not a big additional step in what we have to spend there, whereas the optimization of the marketing spend is much, much bigger.

Speaker #3: And therefore, the approach we have chosen is a very economically reasonable approach, and it shows month by month. On one hand, we have to grow, but also, on the other hand, we have the results that we are seeing with the RX growth that this is really for us the right and good strategy.

Speaker #3: Regarding that, we have never told the market that we are going to take over the full co-payment for the whole market for everything in next year.

Speaker #3: So and and you can be assured that what we will do next year will again be economically reasonable and yeah we'll we'll support the RX business but in a way that we also achieve our our overall targets which is becoming next year cash positive and and we have the midterm the midterm targets that that we and to achieve them that that's the the overlay this will drive our policy also in the next year which will we will communicate if the time is is the right one.

Daniel Wüest: You can be assured that what we will do next year will again be economically reasonable. We will support the Rx business, but in a way that we also achieve our overall targets, which is becoming next year cash positive. We have the midterm targets that we need to achieve, that is the overlay. This will drive our policy also in the next year, which we will communicate if the time is the right one.

Walter Hess: You can be assured that what we will do next year will again be economically reasonable. We will support the Rx business, but in a way that we also achieve our overall targets, which is becoming next year cash positive. We have the midterm targets that we need to achieve, that is the overlay. This will drive our policy also in the next year, which we will communicate if the time is the right one.

Speaker #2: Okay, great. And then secondly, on your guidance philosophy, you upgraded guidance still appears somewhat more conservative than your targets in recent years.

Jan Koch: Okay, great. Secondly, on your guidance philosophy, the upgraded guidance still appears somewhat more conservative than your targets in recent years. You are already at the upper end of your sales guidance after H1. You mentioned our record accelerated further in the first week of Q3. Also based on the chart on slide 22, it seems unlikely that you will reach the full year adjusted EBITDA loss of EUR 17.5 million. Are there any potential headwinds worth flagging in H2, or are you just simply taking a more conservative approach here?

Speaker #2: You're already at the upper end of your sales guidance after H1, and then you mentioned RX growth accelerated further in the first weeks of Q3.

Speaker #2: So and and and then also based on the chart on on slide 22 it seems unlikely that you will reach the the full year just EBITDA loss of 17.5 million.

Speaker #2: Are there any potential headwinds worth flagging in H2, or are you just simply taking a more conservative approach here?

Daniel Wüest: Let me answer that question. I think we are a little bit burnt. There is a lesson learned of that. You do not underpromise and then over deliver, then the other way around. If you tell me now differently, then we take it, but it will not change anything. No, I think more on a serious note, I think that the current trading definitely would maybe justify a little stance of more guiding, more aggressive. However, as you said, we do not see any headwinds. But, like with thunderstorms or orchids, you do not see them come, and all of a sudden they are there. You do not expect anything, but we also would like to have some buffer to the upper end, to the lower end, because now with 2 years and basically every second week, there is something new popping up, which looks initially kind of threatening.

Speaker #3: Let me answer that question and I think we are a little bit burnt it's the lesson learned was that you on the promise and and over delivered and the other way around that's if you tell me now differently then we we we take it but won't change anything.

Speaker #3: No I think more on on a serious note I think that the current trading definitely would maybe justify a little stance of more guiding more aggressive however as you said we do not see any any headwinds but as like with thunderstorms or orcans you you can't you don't see them come and all of a sudden they are there we do not expect anything but we also would like to have some buffer to the to the upper end to the to the lower end because yeah I'm now with two years and basically every second week there's something new is popping up which looks initially kind of threatening but on on but we always get get away with it and get around of it and therefore I think we we are just not in a in in a business which is going straight and smoothly and therefore we definitely have built in to both ends a little bit of buffering.

Daniel Wüest: But we always get away with it and get around of it. Therefore, I think we are just not in a business which is going straight and smoothly. Therefore, we definitely have built in to both ends a little bit of buffer.

Speaker #2: Great, that sounds good. And then, lastly, did the recent heat wave have any impact on your OTC or your RX businesses?

Jan Koch: Great. That sounds good. Lastly, did the recent heatwave have any impact on your OTC or your Rx businesses?

Speaker #3: Yeah, on the OTC, of course it had, let's say, an impact, but throughout the year this will be again compensated.

Daniel Wüest: Yeah, on the OTC, of course, it had a, let's say, an impact. But, throughout the year, this will be again, compensated. On the Rx, as also mentioned, we see further acceleration in July and August. I think the need for medication based on prescribed medication on chronic, there is not, at least not a negative one, if then a positive one on that angle. But it is nothing that would change our view on the full year.

Walter Hess: Yeah, on the OTC, of course, it had a, let's say, an impact. But, throughout the year, this will be again, compensated. On the Rx, as also mentioned, we see further acceleration in July and August. I think the need for medication based on prescribed medication on chronic, there is not, at least not a negative one, if then a positive one on that angle. But it is nothing that would change our view on the full year.

Speaker #3: On the RX as as as also mentioned we see further acceleration in July and August. So I think the the need for medication based on prescribed medication on chronic there is not at least not a negative one if then a positive one on on that angle.

Speaker #3: But it's nothing that would change our view on the full year.

Speaker #2: Okay great. Thank you.

Jan Koch: Okay, great. Thank you.

Speaker #3: Thank you.

Daniel Wüest: Thank you.

Walter Hess: Thank you.

Speaker #1: Thank you very much. The next question is from Urs Kunz, Research Partner.

Operator: Thank you very much. The next question is from Urs Kunz, Research Partners.

Speaker #4: Good morning and thanks for taking my questions. I've also three questions. First question is again regarding your guidance on the Trusted EBITDA this range could you elaborate a little bit is is the the range dependent on on the growth or are there other things that yeah make it more being 10 or 17.5 million?

Urs Kunz: Good morning, and thanks for taking my questions. I have also three questions. First question is, again, regarding your guidance on the adjusted EBITDA, this range. Could you elaborate a little bit? Is the range dependent on the growth, or are there other things that make it more being 10 or 17.5 million? Then the second question is just a short one on the adjustments in H1 were 9.1 million. Is this all for the whole year, or do we have to expect more in H2? The last question would be on transport costs. You mentioned somewhere in a slide that they are up EUR 0.20. Are you confident that this EUR 0.20 is enough to fulfill all requirements that we see now?

Speaker #4: Then, the second question is just a short one on the adjustments in H1—were €9.1 million. Is this all for the whole year, or do we have to expect more in H2?

Speaker #4: And the last question would be on transport costs. You mentioned somewhere in a slide that they are up 20 cents are you confident that this 20 cents is enough to fulfill all requirements that we see that are yeah we see now yeah.

Daniel Wüest: Okay. Let me start with the first question, EBITDA guidance. I think that is clearly derived on our amended forecast that approaches because we have a rolling forecast there, which has the self-guidance, the top-line growth as underlined components, and that is derived from them. If I think that happens, then I think that is somehow calibrated to the midpoint, to the guidance. If we are better or worse, then we have a deviation within the range. I think it is definitely, it is top-line, but it is also the execution of our cost measures that this will run as planned for the time being, that works out perfectly. I think these are basically the main drivers of the EBITDA guidance. To your second question, the adjustments in H2, I think, which we already know, because otherwise we need to disclose it. No, I think that won't be in that magnitude.

Speaker #3: Okay, let me start with a first question. EBITDA guidance, I think, that's clearly derived from our amended forecast – the budget will go with the other rolling forecast there.

Speaker #3: Which has kind of the the the the soft guidance top line growth as as as underlined component and that's derived from them and if I think that happens then I think that somehow calibrated to the to the midpoint to the guidance and if we are kind of better or or or worse then we we have a deviation within the the range but I think it's definitely it's top line but it's also kind of kind of the execution of our cost measures that this will run as planned for the time being.

Speaker #3: That every 'that' that works out, works out perfectly. And I think these are basically the main drivers of the EBITDA guidance.

Speaker #3: Your second question adjustments in in H2 I. Which we we we we already know because otherwise we we should need to disclose it. No I think that won't be in that magnitude I can can rule that out maybe a few hundred thousand or to to to to to million but but nothing nothing more.

Daniel Wüest: I can rule that out, maybe a few hundred thousand or 2 million, but nothing more. Okay, what was the third question?

Speaker #3: And, okay, what was the third question?

Urs Kunz: Can you repeat the third question, please?

Speaker #4: Trent can you repeat?

Speaker #3: Oh transport costs yeah.

Daniel Wüest: Oh, transfer cost. Yeah.

Urs Kunz: Oh, transfer cost. Okay.

Speaker #4: Yeah this okay.

Speaker #3: Yeah. Yeah they they they affected in transport costs and but this additional 20 euro cents they they they were not yet effective in the first half therefore but in the for the second half that that's fully factored in and it's taken care of and there should not be any negative surprises on on that end.

Daniel Wüest: They are factored in, transfer costs, but this additional EUR 0.20, they were not yet effective in the H1, therefore. But for the H2, that is fully factored in and it is taken care of, and there should not be any negative surprises on that end.

Urs Kunz: Are you confident that this is enough for all the requirements, be it temperature things, signatures, to cover it?

Speaker #4: And you are confident that this is enough for all the requirements, be it temperature, things like signatures, and so on, to cover it.

Speaker #3: Yes yeah that's that's mainly the the the the signatures this that you have to which and then we we we we have that negotiated with the with the logistic providers and that's the reason why we are very confident on the on the cost.

Daniel Wüest: Yes. That is mainly the signatures that you have to, which, and then we have that negotiated with the logistic providers, and that is the reason why we are very confident on the cost.

Speaker #4: Okay thanks a lot.

Urs Kunz: Okay, thanks a lot.

Speaker #1: Next question goes to Sebastian Fogel, UBS.

Operator: Next question goes to Sebastian Vogel, UBS.

Speaker #2: Hello yeah I've got three questions I also would ask them one by one. The first one is on a marketing spending. In terms of exit rates or can you give us a little bit of an indication how was it in the end of the first half and what is the sort of as percentage of sales the number that is the one that you're aiming for going forward?

Sebastian Vogel: Hello. Yeah, I have got three questions. I also would ask them one by one. The first one is on the marketing spending. In terms of exit rates, can you give us a little bit of an indication, how was it in the end of the H1? What is the sort of, as potential states, the number that is the one that you are aiming for going forward?

Speaker #3: I didn't get the first part of the question. What is the exit?

Daniel Wüest: I did not get the first part of the question. What is the exit-

Walter Hess: I did not get the first part of the question. What is the exit-

Speaker #2: The sort of the exit marketing spending. So, in that sense, what you have seen—a 5.8 for the full first half—was it in June or in May more like closer to the 5%, or was it closer to 4%, or was it actually above the 5.8?

Sebastian Vogel: The sort of the exit marketing spending. In that sense, what you have seen a 5.8 for the full H1. Was it in June or in May, more like closer to the 5% or was it closer to 4% or was it actually above the 5.8? To have a little bit of an understanding what is the 5.8 worth, essentially.

Speaker #2: To have a little bit of an understanding, what's the 5.8 versus, essentially?

Speaker #3: Yeah I think you have to take into consideration that basically January February there were there there was no co-payment only on on the net tax brand and therefore the the half year does not show the the the full half year it's only for out of out of six months but I think you can therefore you should maybe slightly keep it as it is or slightly increase it and but I think that's for the time being that's seems to be reasonable runway also for the second half of the of the year and then from 27 onwards as Walter mentioned we are about to define our our Rx co-payment strategy and therefore any statement here would would not be backed and therefore let's focus on the second half of 26 where you can assume more or less the same marketing ratio.

Daniel Wüest: I think you have to take into consideration that basically January, February, there was no co-payment on the medpex front, and therefore, the half year does not show the full half year. It is only four out of six months. I think you can, therefore, you should maybe slightly keep it as it is or slightly increase it. I think that for the time being, that seems to be a reasonable runway, also for the H2. Then from 2027 onwards, as Walter mentioned, we are about to define our Rx co-payment strategy, and therefore any statement here would not be backed. Therefore, let us focus on the H2 2026, where you can assume more or less the same marketing ratio.

Speaker #2: Got it. Many thanks. My second question would be on the net working capital side. Do you see that as a sort of headwind or a tailwind in the second half?

Sebastian Vogel: Got it. Many thanks. My second question would be on the net working capital side. Do you see that as a sort of a headwind or a tailwind in H2?

Daniel Wüest: In H2, I see it as a tailwind. Because, of course, if you listen to us, we assume that maybe the relative size could then slightly increase, but we all have initiated measures, and we will initiate further measures. And the half year, it is always from a network capital point of view, a little bit worse than at the end of the year. Therefore, I assume kind of a neutral to slightly positive trend, but rather neutral.

Speaker #3: The second half I see it as a as a tailwind. Because of of course if if you if you listen to us we we we assume that maybe the relative size could still slightly increase but we we we we all have initiated measures and we will initiate further measures and the the half year it's always kind of from an network capital point of view a little bit worse than the the end of the year and therefore I I assume kind of a neutral to slightly positive trend but rather neutral.

Speaker #2: Got it, many thanks. My third question would be about the contribution margin. In the past, you have given some indications of where you're aiming for, so I'd like to get a bit of a market-to-market update, so to say.

Sebastian Vogel: Got it. Many thanks. My third question would be on the contribution margin. You, in the past, have given some indications where you are aiming for, and therefore to have a bit of a market to market, so to say. Can you give us a bit of a sense there? What is the contribution margin after fulfillment cost at the moment, at least on a ballpark for Rx, OTC, digital service, and on a group level, if possible?

Speaker #2: Can you give us a bit of a sense there—what is the contribution margin after fulfillment cost at the moment, at least a ballpark, for Rx, OTC, digital service, and at a group level if possible?

Speaker #3: I think all of our friendly competitors would be very interested in these these things and know that that's something which we which we would not like to disclose because that that that's highly relevant from a competition point of view but we can we can have kind of a of a deep dive in a in a smaller round and then we can provide you with a little bit of guidance there.

Daniel Wüest: I think all of our friendly competitors would be very interested in these things. No, that is something which we would not like to disclose because that is highly relevant from a competition point of view. But we can have kind of a deep dive in a smaller round, and then we can provide you with a little bit of guidance there.

Speaker #3: Yeah.

Speaker #2: Got it, many thanks. I'm happy to go back to the queue.

Sebastian Vogel: Got it. Many thanks. I will happy to go back to the queue.

Operator: Thank you very much. The next question is from Ramon Huber, Limmat Capital.

Speaker #1: Thank you very much. The next question is from Ramon Huber, Limmat Capital.

Speaker #5: I have two questions. First, you mentioned that it even accelerated after the end of June. Are you seeing Rx sales as a percentage-wise increase?

Ramon Huber: I would have two questions. First is, like you telling that it even accelerated after end of June, the Rx sales. You see that as percentage-wise? Because the Q3 last year was compared to Q2 also very strong. Is it percentage-wise even better than what we have seen in Q2?

Speaker #5: Because, like, Q3 last year was, compared to Q2, also very strong. So is it, percentage-wise, even better than what we have seen in Q2?

Daniel Wüest: Yes. As I indicated, in Q2 it was the 46% and it continued to further grow also percentage-wise in July and August so far.

Speaker #3: Yes. As indicated in Q2, it was the 40.6%, and it continued to further grow, also percentage-wise, in July and August so far.

Speaker #5: Okay. And and then coming back to to the guidance and so what has to happen that at the end you get lower than this 10 million you know when when you take your parts bars you say you talked about that you try to work getting closely already in Q3 to EBITDA flat or slightly negative.

Ramon Huber: Okay. Coming back to the guidance. What has to happen that at the end you get lower than this EUR 10 million? When you take your parts, you talked about that you try to work getting closely already in Q3 to EBITDA flat or slightly negative. What had to happen then in Q4 that you get below EUR 10 million in the negative case?

Speaker #5: So what had to happen then in Q4 that you get below 10 million in the negative case?

Speaker #3: Yeah I think basically you we have to find kind of a one one additional million. No I I think it's it's Q4 is always a good quarter and I think let's say that the basis whether we are rather going to the to the to the aggressive or the to the wide end the wide the the lower or the higher end of the of the range is definitely Q3 because Q3 it's extremely difficult to predict.

Daniel Wüest: I think basically we will have to find kind of one additional million. I think Q4 is always a good quarter, and I think, let's say, the basis whether we are rather going to the aggressive or the lower or the higher end of the range is definitely Q3. Because Q3, it is extremely difficult to predict. It is holiday season, we had this heatwave, which had no impact on the distributors and the Rx, but let's say OTC could have been better. Let's see how Q3 turns out because Q4 is much more predictable and manageable, and Q3 will lay the foundation to where we will end up in our EBITDA range.

Speaker #3: It's holiday season. Now we had this heat wave which is was kind of had no impact on the digital service and Rx but let's say OTC would have could have been better and let's see how Q3 turns out and because Q4 is much more predictable and and manageable and Q3 will lay the foundation to where we will end up in our EBITDA range.

Speaker #5: Okay. But Rx definitely will help then.

Ramon Huber: Okay. But Rx definitely will help then.

Speaker #3: Rx always helps. Not not only today but especially and and what we see is we. We we we really have a good momentum a bit in Rx a bit in in teleclinic being retail media marketplace anyway.

Walter Hess: Rx always helps. Not only today, but what we see is we really have a good momentum, be it in Rx, be it in TeleClinic, be in retail media, marketplace, anyway. The costs are managed extremely tight. We have announced in June, the layoffs, which all have already been executed. So we will see also there the results in the second half of the year. As Daniel mentioned before, the past learned us to be cautious with the guidance. Of course, we try to be at the good end. But, as Daniel said, let's now accomplish Q3. We will communicate then after Q3, and then let's accomplish Q4 and talk again then about where we end this year.

Speaker #3: The costs are managed extremely tightly. We announced the layoffs in June, which have all already been executed. So we will also see the results there in the second half of the year.

Speaker #3: And as Daniel mentioned before, the past taught us to be cautious with the guidance and, of course, we try to be at the good end. But yeah, as Daniel said, let's now accomplish Q3.

Speaker #3: We will communicate then after Q3, and then let's accomplish Q4 and talk again about where we end this year.

Speaker #5: Thank you.

Ramon Huber: Thank you.

Operator: Question goes to Guillaume Galan, from Barclays. Go ahead.

Speaker #1: The question goes to Guillaume Galan from Barclays. Go ahead.

Speaker #6: Hi Walter. Hi Daniel. I have three questions, if that's fine. The first one is on non-Rx. It feels like it's been growing 4% in Q2 on the OTC side.

Guillaume Galan: Hi, Walter. Hi, Daniel. I have three questions, if that's fine. The first one is on non-Rx. It feels like it's been growing 4% in Q2 on the OTC side. But when looking at the end market trends in July, it feels slightly softer. Any color here would be helpful. Also thinking into H2, it feels like Q4 has tougher comps, which was a pretty strong quarter for you last year. Should we assume something around low single digits in Q4? My second question is around customer acquisition cost. If you could give some color around the trends there, how it improved year on year, would be super helpful, and whether it is sustainable into H2. The last is more on the financing side. We're looking at the 2028 converts, it feels as if now well into the money.

Guillaume Galland: Hi, Walter. Hi, Daniel. I have three questions, if that's fine. The first one is on non-Rx. It feels like it's been growing 4% in Q2 on the OTC side. But when looking at the end market trends in July, it feels slightly softer. Any color here would be helpful. Also thinking into H2, it feels like Q4 has tougher comps, which was a pretty strong quarter for you last year. Should we assume something around low single digits in Q4? My second question is around customer acquisition cost. If you could give some color around the trends there, how it improved year on year, would be super helpful, and whether it is sustainable into H2. The last is more on the financing side. We're looking at the 2028 converts, it feels as if now well into the money.

Speaker #6: But we're looking at the end market trends in July. It feels slightly softer, so any color here would be helpful. And also, thinking into H2, it feels like Q4 has tougher comps.

Speaker #6: It was a pretty strong quarter for you last year, so you're projecting something around low single digits in Q4. My second question is around customer acquisition cost.

Speaker #6: If you could give some color around the trends there, how it improved beyond the year would be super helpful, and whether it is sustainable into H2.

Speaker #6: And the last one is more on the funding side. So we're looking at the 2028 convert. It feels it's now well, well into the money.

Speaker #6: So, should we think about the bench today, and any update on the capital allocation policy? Thank you.

Guillaume Galan: Should we think about the balance sheet today? Maybe any update on the capital allocation policy? Thank you.

Guillaume Galland: Should we think about the balance sheet today? Maybe any update on the capital allocation policy? Thank you.

Daniel Wüest: I'm sorry, your connection was quite bad. Could you please repeat the third question?

Speaker #3: And sorry, your connection was quite bad. Could you please repeat the third question?

Speaker #6: Yeah. The third question was on the financing and the convert. So we're looking at the 2028 convert; they're well in the money. So I just wanted a quick update on the capital allocation policy and how we should think about it going forward.

Guillaume Galan: Yeah. The third question was on the financing and the converts. When looking at the 2028 converts, they are well in the money. I just wanted a quick update on the capital allocation policy and how should we think of the balance sheet going forward. Thank you.

Guillaume Galland: Yeah. The third question was on the financing and the converts. When looking at the 2028 converts, they are well in the money. I just wanted a quick update on the capital allocation policy and how should we think of the balance sheet going forward. Thank you.

Speaker #6: Thank you.

Daniel Wüest: Thank you. Let's start with the last question. The 2028 convert, yes, you're right. I think it trades roughly 150% to 160%, and it's full equity. I think it's not a year ago, I think we launched it, and of course, we evaluate our options, what we can do with it. Unfortunately, it has no soft call in it because the maturity is only three years. I think, first of all, it's extremely comfortable situation because we consider it as equity, and also provides us with optionality, which we will take into consideration and make our heads around it. The second one regarding customer acquisition cost. As you have seen on slide number 9, we really have optimized and driven down the customer acquisition cost to a really low level.

Speaker #3: Thank you. Let's let's start with the last question. The the 28th convert will yeah you you're right. It's I think it trades roughly 150 to 150 160% and it's it's full equity.

Speaker #3: I think we it's not not a year ago I think we launched it and we will of course we we evaluate our options what we what we can do with it.

Speaker #3: Unfortunately it has no soft call in it that because the the maturity is only three years but we I think first of all it's extremely comfortable situation because that's basically we consider it as as as as equity and also provides us with kind of optionality which we will take into consider consideration and make our heads around it.

Speaker #2: The second one regarding customer acquisition cost — as you have seen on slide number nine, we really have optimized and driven down the customer acquisition cost to a really low level.

Walter Hess: The second one regarding customer acquisition cost. As you have seen on slide number 9, we really have optimized and driven down the customer acquisition cost to a really low level.

Daniel Wüest: We continue to further optimize, of course, but we think at that level, in combination with the court payment exemption, we have a very good base to further accelerate growth and also continue the path that has started a few months ago with Rx. The first question, OTC and market trends. Yeah. On the OTC, on the market this year, the market in the H1 was also around 3.5% to 4%, the overall market growth. We are at the same level as we steer it to that level. At the end, the reason I explained before, we focus on profitable and the long-term, more profitable Rx customers. On OTC, we see a continuation that the overall market continues to grow low single-digit percentage. On telemedicine, you have seen the growth there, and this will definitely continue.

Speaker #2: And we continue to further optimize of course but we think that that level in combination with the court payment exemption we we we have a very good a very good base to further accelerate growth and also yeah continue the the path that has started a few months ago with Rx.

Walter Hess: We continue to further optimize, of course, but we think at that level, in combination with the court payment exemption, we have a very good base to further accelerate growth and also continue the path that has started a few months ago with Rx. The first question, OTC and market trends. Yeah. On the OTC, on the market this year, the market in the H1 was also around 3.5% to 4%, the overall market growth. We are at the same level as we steer it to that level. At the end, the reason I explained before, we focus on profitable and the long-term, more profitable Rx customers. On OTC, we see a continuation that the overall market continues to grow low single-digit percentage. On telemedicine, you have seen the growth there, and this will definitely continue.

Speaker #2: And the first question: OTC end market.

Speaker #3: ket trends.

Speaker #2: Yeah. The the on on on the OTC on the market this year the market in the first half year was also around 3.5 to 4%.

Speaker #2: The overall market growth. So we are at the same level as we steer it to that level. At the end, the reason I explained before—we focus on profit, on profitable and long-term, more profitable Rx customers.

Speaker #2: And so, on OTC, we see a continuation, that the overall market continues to grow at low single-digit percentages. On telemedicine, you have seen the growth there, and this will definitely continue—telemedicine will become more and more important.

Daniel Wüest: Telemedicine will become more and more important, also in the standard care in Germany. The trend very much goes further, might even increase. Also on the retail media, as we are really at the forefront there in Europe and mainly in Germany, retail media is quite a young discipline. Also there, we see a strong upward trend, also in the next years. Does this answer your questions, Guillaume?

Walter Hess: Telemedicine will become more and more important, also in the standard care in Germany. The trend very much goes further, might even increase. Also on the retail media, as we are really at the forefront there in Europe and mainly in Germany, retail media is quite a young discipline. Also there, we see a strong upward trend, also in the next years. Does this answer your questions, Guillaume?

Speaker #2: In also in the standard care in Germany so there the trend very much goes further. Might even increase. And also on the retail media as we are really at the forefront there and in in Europe and mainly in Germany retail media is quite a young discipline.

Speaker #2: Also, there we see a strong upward trend in the next years. Does this answer your questions, Guillaume?

Speaker #6: Yeah, thank you. Thank you very much.

Guillaume Galan: Yes. Thank you. Thank you very much.

Guillaume Galland: Yes. Thank you. Thank you very much.

Daniel Wüest: Okay.

Walter Hess: Okay.

Speaker #1: Thank you very much. The next question goes to Gianmarco Vero from ZKB. Please go ahead.

Operator: Thank you very much. The next question goes to Gian Marco Viero from Zürcher Kantonalbank. Please go ahead.

Speaker #7: Thank you. Good afternoon, everyone. Just two questions left from my side. So, first, you mentioned in the beginning or mid-March that you have there also combined development teams to also improve the traffic, as well as customer engagement and customer loyalty on your platform.

Gian Marco Viero: Thank you. Good afternoon, everyone. Just two questions left from my side. First, you mentioned in the beginning of mid-March, that you have there also combined the development teams to also improve the traffic, also the customer engagement and customer loyalty on your platform. Besides the health companion, is there anything more to come also out of this partnership that you might roll out in H2 of this year? Then the second question is just a nitty-gritty one on the other operating income. Last H1, you still had there 4.4 million other operating income. Now it is only half a million. Is there any change that is more to come in H2? Any seasonalities in there, or is the normal run rate on an annual basis, roughly 1 million of other operating income that you expect there? Thank you.

Gian Marco Werro: Thank you. Good afternoon, everyone. Just two questions left from my side. First, you mentioned in the beginning of mid-March, that you have there also combined the development teams to also improve the traffic, also the customer engagement and customer loyalty on your platform. Besides the health companion, is there anything more to come also out of this partnership that you might roll out in H2 of this year? Then the second question is just a nitty-gritty one on the other operating income. Last H1, you still had there 4.4 million other operating income. Now it is only half a million. Is there any change that is more to come in H2? Any seasonalities in there, or is the normal run rate on an annual basis, roughly 1 million of other operating income that you expect there? Thank you.

Speaker #7: So, besides the Health Companion, is there anything more to come out of this partnership that you might roll out in the second half of this year?

Speaker #7: And then the second question is just a nitty-gritty one. On the other operating income last half year, you still had there €4.4 million other operating income.

Speaker #7: Now it's only half a million. Is there any change? Is there more to come in the second half? Are there any seasonalities in there, or is the normal run rate on an annual basis roughly €1 million of order operating income—that's what you expect there?

Speaker #7: Thank you.

Daniel Wüest: I start with the last one just to get that out of the way. I think last year, remember, that was also an EBITDA adjustment. We had the sale of two non-operational real estate, being the facility and the warehouse in Heerlen and then the property in Steckborn, which accounted for 3.5 million. That went into other operating income. What you see in this year, there is no exceptional operational income, and the half a million or 1 million on a yearly basis is a slightly growing base there. You can take this 1 million for the full year. The first question about the companion. For us, it is really a very strategic asset that we have built and launched last year. Now we have rolled it out over all the DocMorris platform.

Speaker #3: I'll start with the last one, just to get that out of the way. I think last year, remember, that was also an EBITDA adjustment.

Speaker #3: We we had we had the sale of two non-operational real estate being the the facility and the warehouse in in in in Holle and then the the property in in Steckborn which accounted for 3.5 million and what you that went into other operating income and what you see in this year there's no exceptional operational income and the the half a million or 1 million on a yearly basis is kind of a slightly growing base there and you can take this 1 million for the full year.

Speaker #2: Yeah. And the first question about the companion—so for us, it is really a very strategic asset that we have built and launched last year.

Walter Hess: The first question about the companion. For us, it is really a very strategic asset that we have built and launched last year. Now we have rolled it out over all the DocMorris platform.

Speaker #2: And now we have rolled it out overall the Doc Morris platform and we see really that the the acceptance of the customer is is is is very good and the engagement of of the users making use of the assistant is very good because it's a shopping assistant.

Daniel Wüest: We see really that the acceptance of the customer is very good. The engagement of the users making use of the assistant is very good because it is a shopping assistant, it is a health assistant, it is an assistant for customer service. So it is really a 360 degree assistant. We see already now.

Speaker #2: It's a health assistant. It's an assistant for customer service. So it's really a 360 degree assistant. And yeah we see already now we see relevant impact on on our all our main KPIs and we we further develop.

Walter Hess: We see a relevant impact on all our main KPIs, and we further develop. We are preparing to roll out further services, which again, will increase engagement. We are focusing also on specific chronic diseases that we will reinforce via the platform and with the help of the assistant. So there is a lot of things being deployed week by week, also in the background, and which shows result that are online and which will also help in the future. It is for us really also a USP, what we have built here.

Speaker #2: So, we are preparing to roll out further services, which again will increase engagement. We are also focusing on specific chronic diseases that we will reinforce via the platform and with the help of the assistant.

Speaker #2: So yeah there is a lot a lot of things being deployed week by week also in the background and which shows which shows result that are underlying and which will yeah also help in in in the future.

Speaker #2: And it's really also a USP for us, what we have built here.

Gian Marco Viero: Clear. Thank you.

Gian Marco Werro: Clear. Thank you.

Speaker #7: There's here. Thank you.

Speaker #1: Thank you very much, everyone, for your participation. With that, we have answered all the questions, and I would like to hand back to your host for the closing remarks.

Operator: Thank you very much everyone for your participation. With that, we answered all the questions, and I would like to hand over back to your host for the closing remarks.

Speaker #2: Yeah. Well, thanks a lot again. Thanks to all of you for joining this call and for taking the time. I hope you got the information that is necessary for your assumptions.

Walter Hess: Well, thanks a lot again. Thanks to all of you for joining this call, for taking the time. I hope you got the information that is necessary for your assumptions. On our side, we can just say on our side, the lamps are on green. We are rapidly advancing with our transformation of the whole platform, of the digital and AI health platform in all regards. We are rapidly executing our AI-first strategy. We see a good, even great momentum in RxDigital Services. So we control costs really well. We reduce them month by month. With that, we can just reconfirm we are very confident to achieve also the raised 2026 guidance, and we are very confident to become cash positive in the course of 2027. With that, thanks a lot again, and I wish you all a nice day. Bye-bye.

Speaker #2: On our side, we can just say on our side that the lamps are on green. And we are rapidly advancing with our transformation of the whole platform, of the digital and AI health platform in all regards.

Speaker #2: We are rapidly executing our AI-first strategy. We see good, even great momentum in Rx digital services, and we control costs really well.

Speaker #2: We reduce them month by month, and with that, we can just reconfirm we are very confident to achieve also the raised guidance for '26, and we are very confident to achieve, to become cash positive in the course of 2027.

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Half Year 2026 DocMorris AG Earnings Call

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