• Revenue Growth: 7% increase in revenue with contributions from all business segments.
• Teleclinic Revenue: Doubled to CHF11 million with an EBTA exceeding CHF3 million.
• Cash Balance: CHF95 million at the end of 2024.
• Gross Margin Improvement: Increased by 350 basis points.
• Adjusted EBTA: CHF48.6 million, slightly below the guidance of CHF50 million.
• Non-RX Business Profitability: Achieved profitability in 2024.
• Germany Segment Growth: 6.9% growth in local currency.
• EU Segment Growth: 3.6% top-line growth, reversing a previous decline.
• Active Customer Base: Increased by 13% to 10.3 million.
• Capital Raise: Planned CHF200 million to support RX growth and refinancing.
• Net Debt: CHF228 million, with plans to reduce significantly post-capital raise.

• Warning! GuruFocus has detected 3 Warning Signs with XSWX:DOCM.

Release Date: March 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• DocMorris AG (XSWX:DOCM) achieved significant milestones in 2024, including a fivefold increase in new RX customers since the introduction of Carlink.
• The company reached profitability in its non-RX business, reflecting successful execution of its breakeven program.
• Overall revenue increased by 7%, with contributions from all business segments.
• Teleclinic doubled its revenues, demonstrating strong performance and attractive profitability metrics.
• Effective cash management resulted in a cash balance of CHF95 million at the end of 2024.

Negative Points

• The EBTA came in lower than last year, reflecting additional marketing expenses for the ERX business.
• There was a slight decline in basket size, order frequency, and repeat order rate, attributed to the influx of new customers.
• The company is unable to provide a detailed short and mid-term guidance due to being in a capital raise mode.
• Marketing expenses increased significantly, impacting the adjusted EBTA.
• The company faces challenges in gaining new customers, partially due to cautious marketing spendings in the first quarter.

Q & A Highlights

Q: What caused the restatement of RX revenues in the annual report? A: Daniel Wuest, CFO, clarified that there was no specific restatement for RX revenues. A restatement of CHF 3 million was due to a positive legal decision, resulting in a cashback from suppliers, but it was not specific to RX revenues.

Q: Can you confirm the 50% RX growth for Q1 2025? A: Walter Hess, CEO, confirmed that the 50% growth is based on the EUR 37 million base from Q1 last year, reflecting growth in both euros and local currency.

Q: How will the introduction of the electronic patient record in Germany affect customer journeys? A: Walter Hess, CEO, stated that the electronic patient record will be beneficial, enhancing the ecosystem approach and improving customer convenience. Although the nationwide rollout may take time, it is seen as a positive development.

Q: What is the current status of discussions with potential investors for the CHF 200 million capital raise? A: Daniel Wuest, CFO, expressed confidence in raising the CHF 200 million through a rights issue, supported by positive feedback from mandated banks. Selling a stake in Teleclinic is considered a last resort.

Q: Why is there no guidance beyond Q1 2025? A: Daniel Wuest, CFO, explained that due to the ongoing capital raise and related legal restrictions, detailed guidance will be provided closer to the capital increase, ensuring alignment with offering documents.

Q: How does the company plan to manage marketing expenditures with the capital increase? A: Daniel Wuest, CFO, indicated that while the capital increase will allow for targeted marketing investments, the funds will be used judiciously, with a focus on safeguarding the convertible bond and supporting growth.

Q: Can you explain the discrepancy between the average order value (AOV) figures for ERX and the basket sizes shown in the KPIs? A: Walter Hess, CEO, clarified that the CHF 110 AOV includes mixed baskets of RX and OTC products, while the CHF 98 figure is purely for RX, reflecting a mix of new and existing customers.

Q: What is the impact of the ECJ ruling on bonuses and incentives? A: Walter Hess, CEO, noted that the ECJ ruling reaffirmed the 2016 decision on direct bonuses, which is positive. The case now returns to the German court for OTC-related bonuses. Long-term, convenience is expected to outweigh bonuses as a customer driver.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.