DGAP-News: SHOP APOTHEKE EUROPE N.V. / Key word(s): Final Results/Forecast SHOP APOTHEKE EUROPE increases revenues by 60% in 2017; growth projected to further accelerate in 2018 with positive Group-level EBITDA expected. 12.03.2018 / 06:59 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- NOT FOR RELEASE OT DISTRIBUTION IN THE USA, CANADA, AUSTRALIA OR JAPAN. SHOP APOTHEKE EUROPE increases revenues by 60% in 2017; growth projected to further accelerate in 2018 with positive Group-level EBITDA expected. * In 2017 Group revenues rise by +60% to EUR 284 m. * Leading market position in Germany and Continental Europe further extended. * Forecast 2018 I: range for revenue growth 87% to 97%. * Forecast 2018 II: Positive Group-level EBITDA* of EUR 0 to 2 m projected. Venlo/Cologne, March 12, 2018. -- SHOP APOTHEKE EUROPE N.V., Continental Europe's leading online pharmacy, has reached its ambitious growth targets for the 2017 fiscal year (January 1 - December 31, 2017). Boosted by the takeover of Europa Apotheek in November 2017, SHOP APOTHEKE EUROPE has further accelerated its growth rate substantially with Group revenues rising 60% to EUR 284.0 m. For 2018 management expects the pace of growth to further speed up to a rate of 87% to 97% as well as a positive Group-level EBITDA* of EUR 0 to 2 m. The company's dynamic growth is due to an increase in the number of active customers across Europe from 1.8 m at the end of 2016 to approximately 2.7 m at the end of 2017 and the related rise in the volume of orders. The number of orders climbed from 4.0 m to 5.7 m during the period under review, with 76% of those orders coming from existing customers, up from an already high level of 73% in 2016. The return rate stayed at a minimal level of below 1% of orders like in 2016. The number of site visits increased from 41.8 m during the 2016 fiscal year to 71.5 m in 2017. Group revenues rose by 60% during the 2017 fiscal year to EUR 284.0 m from EUR 177.4 m a year earlier. This increase in revenues is due to both organic growth and to the fourth-quarter takeover of Europa Apotheek, which has been consolidated as of November 8, 2017, accounting for EUR 25.1 m in revenues. Gross earnings rose by 59% from EUR 36.3 m to EUR 57.6 m during the 2017 fiscal year, leading to a gross margin of 20.3% compared to 20.5% in 2016. The slight decrease in the gross margin is mainly due to a higher proportion of prescription medications sold as a result of the takeover of Europa Apotheek; these usually have a lower gross margin than other products in the portfolio. Increases in efficiency and economies of scale contributed to a substantially improved administrative expenses ratio. Total administrative costs for 2017 were EUR 13.4 m compared to EUR 9.1 m in 2016. This figure includes one-time costs of EUR 3.6 m related to the takeover of Europa Apotheek and the subsequent increase in capital in order to process the share swap agreed on to undertake the acquisition. Hence, adjusted administrative expenses ratio including depreciations stood at 3.5% in proportion to revenues (previous year: 4.2%). Revenues for SHOP APOTHEKE EUROPE'S profitable core segment "Germany" rose by 44% to EUR 209.5 m (previous year: EUR 145.5 m). During the same timeframe, the overall German online pharmacy market grew by just 11.8% according to a survey conducted by Germany's Federal Association for e-commerce and mail order businesses (Bundesverband E-Commerce und Versandhandel/bevh). Thus, SHOP APOTHEKE EUROPE has been able to further extend its market leadership in Continental Europe's largest online pharmacy market. Due to the bigger ratio of prescription medications sold, the 2017 gross margin stood at 19.8% compared to 20.4% a year earlier. Cost of sales grew at a lower rate than revenues, increasing 33% from EUR 27.5 m in 2016 to EUR 36.8 m in 2017. Accordingly, the sales cost ratio improved to 17.6% for the reporting period compared to 18.8% the previous year. Segment EBITDA** was EUR 6.9 m, up from EUR 4.0 m for the 2016 fiscal year with a margin of 3.3% for the year under review compared to 2.7% in 2016. SHOP APOTHEKE EUROPE'S international markets - which include Austria, France, Belgium, the Netherlands, Spain and Italy - have been once again the company's most dynamic driver of growth, with the volume of business increasing by more than 143%. As a result, revenues for the "International" segment rose to EUR 73.7 m (previous year: EUR 30.4 m) with the segment's gross margin growing significantly during the period under review, up 3 percentage points to 21.4% from 18.4% a year earlier. Due to the high cost of new customer acquisition, 2017 segment EBITDA** was EUR -6.6 m, down EUR 1.9 m compared to EUR -4.7 m the previous year (respectively EUR -4.0 m when adjusted for one-time costs related to the acquisition of Farmaline in 2016). Relative to revenues, the segment's EBITDA margin improved to -8.9% in the period under review compared to -15.6% unadjusted, or -13.0% adjusted respectively in 2016. The segment "Germany Services" posted revenues of EUR 0.7 m (previous year: EUR 2.5 m) excluding sales revenues from intra-Group services that were eliminated as part of the consolidation. Since it contributes only a small share of overall revenues, the segment will be integrated into the "Germany" segment in the future. At 88.4%, the gross margin was at a similarly high level as in 2016 when it stood at 89.7%. Segment EBITDA** was EUR -0.1 m compared to EUR 1.0 m a year earlier. Dr. Ulrich Wandel, CFO of SHOP APOTHEKE EUROPE, comments on the company's development during the 2017 fiscal year: "We have achieved our ambitious growth targets with a revenue increase of 60%. Our accelerated growth course is driven by strong operational results as well as key investment decisions. The integration of Europa Apotheek has further strengthened our growth trajectory. In 2018 we'll keep our foot on the accelerator. We want to achieve an attractive combination of fast growth and profitability during the current fiscal year." For the 2018 fiscal year, SHOP APOTHEKE EUROPE's Management Board forecasts a revenue increase between 87% and 97% to a range of EUR 530 to 560 m, driven primarily by strong international growth and the consolidation of Europa Apotheek. The gross margin is expected to be lower than during the 2017 fiscal year due to the greater proportion of orders for prescription medications. Despite the smaller gross margin, the contribution margin per order will be bigger due to the increase in the size of the average shopping basket. Combined with further improvements in efficiency, effects of scale and further automation, the Management Board forecasts a positive Group-level EBITDA* of EUR 0 to 2 m for the 2018 fiscal year. Brand strategy will be another focus during the coming year. As a result of the acquisitions undertaken in the last two years, SHOP APOTHEKE EUROPE is currently operating its business using several different brand names, which will for the most part be united under a common brand in the medium term. SHOP APOTHEKE EUROPE also plans to continue playing an active role in the consolidation of the online pharmacy market. Due to both potential future acquisitions and a generally greater need for working capital as a result of increased business volume, the Management Board is evaluating different financing models options that allow the company to respond flexibly and quickly should interesting opportunities arise. The investment volume for the current fiscal year is expected to be in the low double-digit million range. Investments will focus on automation and expanding storage capacity, the parallel optimization of our software systems and the standardisation of payment methods across the Group in order to standardise the checkout process for customer orders and further develop our customer relations management across all country webshops. * prior to special effects due to potential transactions and/or acquisitions **Segment EBITDA defined as earnings before interest, taxes, deductions and amortizations as well as Group-level administrative expenses. 2018 FINANCIAL CALENDAR April 26, 2018 Annual General Meeting May 15, 2018 Publication of the results of Q1 2018 August 14, 2018 Publication of the results of the first half of 2018 November 14, Publication of the results of Q3 2018 2018 CONSOLIDATED STATEMENT OF PROFIT AND LOSS. PERIOD ENDED PERIOD ENDED 31.12.2017 31.12.2016 EUR 1,000 EUR 1,000 Revenue 283,992 177,391 Cost of sales -226,407 -141,109 Gross profit 57,585 36,282 Other income 3,015 2,204 Selling and distribution -66,417 -41,036 Administrative expensess -13,378 -9,098 Result from operations -19,197 -11,639 Finance income 40 17 Finance expenses -2,246 -9,338 Net finance costs -2,206 -9,321 Result before tax -21,403 -20,960 Income tax expenses 45 2,515 Result after tax -21,358 -18,445 Attributable to: -21,358 -18,445 Owners of the company CONSOLIDATED SEGMENT FINANCIALS FOR 2017. Germany Internat- German- Eliminat- Consolid- ional y ions ated Servic- es EUR EUR EUR EUR EUR 1,000 1,000 1,000 1,000 1,000 Revenue 209,549 73,716 6,848 -6,121 283,992 Cost of sales -168,04- -57,971 -797 401 -226,407 0 Gross profit 41,510 15,745 6,050 -5,720 57,585 % of revenue 19.80% 21.40% 88.40% 20.30% Other income 2,151 810 54 0 3,015 Selling & distribution -36,801 -23,160 -6,176 5,720 -60,417 Adjusted S&D -36,801 -23,160 -6,176 -60,417 Segment EBITDA 6,859 -6,606 -71 0 182 Adjusted segment EBITDA 6,859 -6,606 -71 0 182 Administrative expenses -12,320 Adjusted AE -8,728 EBITDA -12,137 Adjusted EBITDA -8,545 Depreciation -7,059 EBIT -19,197 Adjusted EBIT -15,605 Net finance cost and -2,161 income tax Adjusted net finance cost -2,161 and income tax Net loss -21,358 Adjusted net loss -17,766 CONSOLIDATED SEGMENT FINANCIALS FOR 2016. Germany Internat- German- Eliminat- Consolid- ional y ions ated Servic- es EUR EUR EUR EUR EUR 1,000 1,000 1,000 1,000 1,000 Revenue 145,549 30,376 4,108 -2,641 177,391 Cost of sales -115,91- -24,777 -423 0 -141,109 0 Gross profit 29,640 5,599 3,685 -2,641 36,282 % of revenue 20.40% 18.40% 89.70% 20.50% Other income 1,810 363 31 0 2,204 Selling & distribution -27,458 -10,698 -2,742 2,641 -38,255 Adjusted S&D -27,419 -9,901 -2,742 2641 -37,421 Segment EBITDA 3,992 -4,735 975 231 Adjusted segment EBITDA 4,030 -3,939 975 1066 Administrative expenses -8,597 Adjusted AE -6,855 EBITDA -8,366 Adjusted EBITDA -5,789 Depreciation -3,273 EBIT -11,638 Adjusted EBIT -9,062 Net finance cost and -6,807 income tax Adjusted net finance cost -1,644 and income tax Result before tax -18,445 Adjusted net loss -10,733 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 with an expanded product range for the whole family in the areas of OTC, beauty and care products as well as prescription drugs SHOP APOTHEKE EUROPE already operates online pharmacies in Germany, Austria, France, Belgium, Italy, Spain and the Netherlands. In Germany, the TÜV-certified shop-apotheke.com is the market leader in terms of traffic. SHOP APOTHEKE EUROPE delivers a broad range of more than 100,000 original products to about 2.7 million active customers quickly and at attractive prices. In addition, SHOP APOTHEKE EUROPE provides comprehensive and consistent pharmaceutical services. SHOP APOTHEKE EUROPE N.V. has been listed on the regulated market of the Frankfurt Stock Exchange (Prime Standard) since 13 October 2016. MEDIA CONTACTS. Trade and public media: Sven Schirmer Mobile: +49 152 28 50 63 61 Email: [email protected] Financial media: Thomas Schnorrenberg Mobile: +49 151 46 53 13 17 Email: [email protected] Investor Relations: Dr. Ulrich Wandel Telephone: +31 77 850 6117 Email: [email protected] DISCLAIMER. This publication is an advertisement. This communication constitutes neither an offer to sell nor a solicitation to buy securities of Shop Apotheke Europe N.V. in any jurisdiction. This is not a securities prospectus. No public offering of any securities of Shop Apotheke Europe N.V. is being made. Statements contained herein may constitute "forward-looking statements." Forward-looking statements are generally identifiable by the use of the words "may", "will", "should", "plan", "expect", "anticipate", "estimate," "believe", "intend", "project", "goal" or "target" or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are based on current expectations and involve a number of known and unknown risks, uncertainties and other factors that could cause the Group's or its industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. You should not place undue reliance on forward-looking statements and the Group does not undertake publicly to update or revise any forward-looking statement that may be made herein, whether as a result of new information, future events or otherwise. --------------------------------------------------------------------------- 12.03.2018 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de --------------------------------------------------------------------------- Language: English Company: SHOP APOTHEKE EUROPE N.V. Dirk Hartogweg 14 5928 LV Venlo Netherlands Phone: 0800 - 200 800 300 Fax: 0800 - 90 70 90 20 E-mail: [email protected] Internet: www.shop-apotheke-europe.com ISIN: NL0012044747 WKN: A2AR94 Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service --------------------------------------------------------------------------- 662507 12.03.2018