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15
MAR
2019

SHOP APOTHEKE EUROPE increases revenues by over 90% to EUR 540 million in 2018.

 

 

NOT FOR RELEASE OR DISTRIBUTION IN THE USA, CANADA, AUSTRALIA OR JAPAN.

 

  • 2018 consolidated adjusted EBITDA margin improved to -2.2% (previous year: -3.0%)
  • 2019: focus on organic growth
  • 2019 forecast I: acceleration of organic growth to ca. 30% with revenues of around EUR 700 million
  • 2019 forecast II: adjusted EBITDA level at least on the level of previous year

 

Venlo, the Netherlands, March 15, 2019. SHOP APOTHEKE EUROPE N.V., one of Continental Europe’s leading online pharmacies, has reached its ambitious growth target for the 2018 financial year (reporting date: December 31, 2018): Consolidated revenues rose by 90%, from EUR 284 million in 2017 to EUR 540 million (organic 25%). Higher-than-expected costs for the integration of nu3 in particular had a negative impact on earnings; nonetheless the adjusted EBITDA margin improved by 0.8% to -2.2%.

The company’s dynamic revenue growth is based on successfully increasing the number of active customers across Europe from 2.7 million at the end of 2017 to ca. 3.5 million at the end of 2018 as well as on the corresponding rise in order volumes. The number of orders placed rose from 5.7 million to 8.7 million year-on-year with the ratio of repeat orders continuing to be at a high level at 81% (2017: 76%). The return rate remained minimal as in previous years. The number of page visits increased from 71.5 million in 2017 to 93.1 million during the reporting period.

Dr. Ulrich Wandel, CFO of SHOP APOTHEKE EUROPE, comments on the 2018 financial year’s business development: “We were able to once more reach our ambitious growth target with revenues of EUR 540 million. Due to the acquisition of nu3 as well as our strategic decision to prepare strong organic growth in 2019, our adjusted EBITDA margin was -2.2%. We strongly believe that further growing our customer base is an investment that will pay off, particularly in regard to the introduction of electronic prescriptions planned for 2020 in Germany.”

Stefan Feltens, CEO of SHOP APOTHEKE EUROPE, emphasizes that, “Our goal is to establish SHOP APOTHEKE EUROPE as the first destination for pharmacy needs in all our markets in the medium term. That’s why we will keep focusing on organic growth to further expand our market share in the DACH region and across Europe. We will do this always keeping an eye on the development of our profitability, which we can steer by controlling the intensity of our growth rate. Our primary goal is to reach break-even EBITDA on Group level in 2020.” SHOP APOTHEKE EUROPE’s Management Board expects an acceleration of the company’s organic growth rate to around 30% (2018: 25%) for the 2019 fiscal year, which correlates to an increase in consolidated revenues to ca. EUR 700 million. The adjusted EBITDA margin is projected to be at least on the previous year’s level or slightly improved during the current fiscal year, with break-even to be achieved in 2020.

As a result of the new business in Switzerland as well as the substantially increased business volume in Austria, the company has decided to adjust its segment reporting structure. Starting with the 2018 financial report, SHOP APOTHEKE EUROPE is reporting the results for two segments, “DACH” and “International”. The DACH segment includes all of the company’s activities in Germany, Austria and Switzerland. The International segment covers operations in the Netherlands, Belgium, France, Italy and Spain. In the past, the company had reported results for the “Germany” and “International” (all markets outside of Germany) segments. The corresponding figures for the previous year have been adjusted accordingly.

Based on the previous segmentation, the Germany segment almost doubled its revenues by 98% to EUR 415 million (previous year: EUR 210 million) while the International segment grew by 69% to EUR 125 million (2017: 74 million).

Consolidated revenues for the 2018 financial year rose by 90%, from EUR 284 million to EUR 540 million. That increase is due to both organic growth of around 25% and the first-time full consolidation of Europa Apotheek during the reporting period. The online pharmacy focuses on prescription medications and provides its customers with special consulting services including drug interaction checks, medication profiles, unique information and patient magazines for people suffering from certain illnesses as well as SMART, a therapy support programme for patients suffering from specific chronic diseases. As a result of the integration of Europa Apotheek, the share of prescription medications sold increased to ca. 31% in 2018 (previous year: ca. 10%), leading to a substantial increase in the value of the average shopping basket to EUR 72.44 (2017: EUR 57.78).

The consolidated gross margin declined in line with expectations, from 20.3% in 2017 to 18.4% in 2018. This is largely due to the higher share of prescription medications sold, which typically have a lower gross margin due to legally required fixed pricing. Overall the gross margin rose by 72%, from EUR 57.6 million in 2017 to EUR 99.3 million. The consolidated segment EBITDA** adjusted for one-off costs improved to EUR 6.8 million compared to EUR 0.2 million in the 2017 financial year.

Improvements in efficiency and effects of scale contributed to an improvement in the administrative expenses ratio. Administrative costs including depreciation rose by EUR 9.3 million from EUR 13.4 million in 2017 to EUR 22.7 million. This includes one-time costs of around EUR 1.6 million connected mainly to a stock option plan and the acquisition of nu3 GmbH. Overall, SHOP APOTHEKE EUROPE was able to reduce its administrative expenses ratio from 4.7% in 2017 to 4.2% in 2018. Adjusted for one-time costs, the administrative expenses ratio was 3.9%. After the deduction of administrative costs, adjusted consolidated EBITDA for 2018 was EUR -11.8 million compared to EUR -8.5 million the previous year. The adjusted EBITDA margin improved to -2.2% compared to -3.0% in 2017.

SHOP APOTHEKE EUROPE generated revenues of EUR 491 million in the profitable DACH segment. That’s an increase of ca. 95% compared to the 2017 fiscal year when revenues were EUR 251 million when adjusted for the new segment structure. Segment EBITDA was EUR 9.8 million or EUR 11.3 million when adjusted for one-off effects.* That’s an increase of 66% or 92% based on the adjusted result compared the 2017 EBITDA of EUR 5.9 million for the DACH segment.

SHOP APOTHEKE EUROPE’s International segment increased its revenues by 49% from EUR 33 million in 2017 to EUR 49 million for the reporting period. Segment EBITDA improved from EUR -5.7 million the previous year to EUR -4.7 million for the reporting period or EUR -4.5 million adjusted for one-off effects.* Relative to revenues, the segment’s EBITDA margin (adjusted) improved to -9.3% in the year under review compared to -17.4% in 2017.

* One-off effects from transactions and/or acquisitions
** Segment EBITDA: Defined as earnings before taxes, interest and deductions as well as Group-level administrative costs.

 

CONSOLIDATED STATEMENT OF PROFITS AND LOSSES.

  FINANCIAL YEAR ENDED ON   FINANCIAL YEAR ENDED ON
December 31, 2017   December 31, 2018
  EUR 1,000   EUR 1,000
Revenues 283,992   539,710
Cost of sales -226,407   -440,392
Gross profit 57,585   99,318
Other income 3,015   196
Selling & distribution costs -66,417   -105,564
Administrative expenses -13,378   -22,679
Operating income (EBIT) -19,197     -28,730
Finance income 40   324
Finance expenses -2,246   -6,185
Net finance costs -2,206   -5,861
Earnings before taxes (EBT) -21,403   -34,591
Taxes on income and earnings 45   982
Period result -21,358   -33,609
Attributable to shareholders: -21,358   -33,609

SEGMENT INFORMATION FOR 2018.

  DACH   International   Consolidated
           
  EUR 1,000   EUR 1,000   EUR 1,000
Revenues 491,078   48,632   539,710
Cost of sales -403,328   -37,064   -440,392
           
Gross profit 87,750   11,568   99,318
% of revenues 17.9%   23.8%   18.4%
           
Other income 156   40   196
Selling & distribution costs -78,082   -16,287   -94,369
Adjusted selling&distribution costs -76,605   -16,132   -92,736
           
Segment EBITDA 9,825   -4,680   5,145
Adjusted segment EBITDA 11,301   -4,524   6,777
           
Administrative expenses         -20,704
Adjusted administrative expenses         -18,530
           
EBITDA         -15,559
adjusted EBITDA         -11,753
           
Depreciation         -13,171
           
EBIT         -28,730
Adjusted EBIT         -24,924
           
Financial result and taxes on income           -4,879
Adjusted financial result and taxes on income           -4.879
           
Period result         -33,609
Adjusted period result         -29,803

SEGMENT INFORMATION FOR 2017.

  DACH   International   Consolidated
           
  EUR 1,000   EUR 1,000   EUR 1,000
Revenues 251,289   32,703   283,992
Cost of sales -201,721   -24,687   -226,407
           
Gross profit 49,569   8,016   57,585
% of revenues 19.7%   24.5%   20.3%
           
Other income 2,592   422   3,015
Selling & distribution costs -46,286   -14,131   -60,416
Adjusted selling&distribution costs         -60,416
           
Segment EBITDA 5,875   -5,693   182
Adjusted segment EBITDA 5,875   -5,693   182
           
Administrative expenses         -12,320
Adjusted administrative expenses         -8,728
           
EBITDA         -12,137
Adjusted EBITDA         -8,545
           
Depreciation         -7,059
           
EBIT         -19,197
Adjusted EBIT         -15,605
           
Financial result and taxes on income           -2,161
Adjusted financial result and taxes on income           -2,161
           
Period result         -21,358
Adusted period result         -17,766

ABOUT SHOP APOTHEKE EUROPE.

SHOP APOTHEKE EUROPE is the leading and fastest-growing online pharmacy in Continental Europe. With the acquisition of Europa Apotheek Venlo in November 2017, SHOP APOTHEKE EUROPE significantly extended its European market leadership. The product range for the whole family in the OTC, beauty and personal care products as well as prescription drugs segments is supplemented by high quality natural food and health products, low carb products and sports nutrition following the acquisition of nu3 GmbH in July 2018.

SHOP APOTHEKE EUROPE already operates online pharmacies in Germany, Austria, France, Belgium, Italy, Spain, the Netherlands and Switzerland.

SHOP APOTHEKE EUROPE delivers a broad range of more than 100,000 original products to over 3.5 million active customers fast and at attractive prices. In addition, SHOP APOTHEKE EUROPE provides comprehensive pharmaceutical consulting services.

SHOP APOTHEKE EUROPE N.V. has been listed on the regulated market of the Frankfurt Stock Exchange (Prime Standard) since 13 October 2016 and part of the SDAX index since 24 September 2018.

 

DISCLAIMER.

This release contains statements that relate to future business performance and future financial performance, as well as to events or developments pertaining to SHOP APOTHEKE EUROPE, and that may constitute forward-looking statements. These statements are based on current expectations and assumptions by SHOP APOTHEKE EUROPE’s management, a large number of which are beyond the control of SHOP APOTHEKE EUROPE. They are therefore subject to a variety of risks and uncertainties. If these risks and uncertainties materialize, or the underlying expectations do not materialize or the assumptions made prove incorrect, actual events, both in a positive and negative sense, may differ materially from those described or implied in the forward-looking statements. SHOP APOTHEKE EUROPE undertakes no obligation to update these forward-looking statements or to correct them in any other than anticipated development. SHOP APOTHEKE EUROPE also does not intend to do so.