SHOP APOTHEKE EUROPE: SOLID AND SUCCESSFUL QUARTER, FULLY IN LINE WITH GUIDANCE. BETTER MARGINS AND CONTINUED MARKET SHARE GAINS.

• Group sales up 20% to EUR 285 million in Q3 (9M up 14% to EUR 877 million).
• Non-Rx sales up 22% in Q3 (9M up 18%).
• Adj. EBITDA for ongoing business operations EUR 3 million in Q3; 0.9% margin, up 2.4pp vs. H1 and 1.8pp year over year.
• Active customer base close to 9 million, up 1 million YTD (Q3 0.3 million) and 1.6 million year over year.
• Customer Net Promoter Score (NPS) again at record level, well above 70.
• Total e-scripts in Germany crossed 0.5 million in October.

 Sevenum, the Netherlands, 31 October 2022. SHOP APOTHEKE EUROPE reported a solid performance for the third quarter of the year, despite a weakened macroeconomic backdrop. The company achieved double-digit revenue growth and continued market share gains across all seven countries in which it operates. Total group sales increased by 20% year over year in Q3 to EUR 285 million and by 14% for the first nine months of the year to EUR 877 million. Non-Rx sales also grew by double digits – 22% year over year in Q3, and 18% year over year in the first nine months of the year to EUR 781 million (9M 2021: EUR 662 million). As one of Europe’s leading e-pharmacies, SHOP APOTHEKE EUROPE added 0.3 million active customers in Q3 2022 (slightly up from 0.2 million as reported in the trading update of October 5, 2022) to reach a total of 8.9 million, 1.6 million higher than the previous year. Effective operational performance at the main distribution centre in Sevenum shortened delivery times, which contributed towards a persistently high net promoter score (NPS) of well above 70 and improved efficiency. Actions to improve margins and costs led to a significant improvement in adjusted EBITDA margin for the ongoing business operations, from -1.5% in H1 to 0.9% in Q3, up 2.4 percentage points. Financial performance, both top and bottom line, continued to be at the full year guidance provided at the start of the year.

SHOP APOTHEKE EUROPE’s CEO, Stefan Feltens, comments: “Our business is solid and is performing well, growing by 20% year over year this quarter. Despite difficult economic times, we continue to welcome thousands of new customers every single day. In Germany, the roll-out of e-Rx is progressing at a slower pace than we had anticipated. Nevertheless, we are reassured by the steady increase in e-scripts, which have reached the half a million mark, and remain confident in the prospect of a nationwide roll-out next year.”

SHOP APOTHEKE EUROPE continued to grow market share across all its seven countries in Q3 2022. By the end of the quarter, the Group’s active customer base totaled 8.9 million, up 1.6 million from Q3 2021 and by 0.3 million from Q2 2022. For the second consecutive quarter, the company successfully increased the average basket value, following a low-point reached in Q1. Meanwhile, shortened delivery times sustained high customer satisfaction levels, with the net promoter score (NPS) remaining at a high level of 73 during the quarter.  

CFO Jasper Eenhorst: “We achieved better contribution margins and reduced costs, while we continued to record very high customer satisfaction. During Q3 we improved our results vs. H1, despite inflationary pressures and without harming our growth strategy. Thanks to all of our people in the teams across SHOP APOTHEKE EUROPE, we are fully on track to meet the financial guidance given at the start of the year.” 

Group sales for the first nine months of 2022 increased by EUR 104 million to EUR 877 million, from EUR 772 million over the same period in 2021. Meanwhile the gross profit margin for the ongoing business was 27.4%, up by 2 percentage points from last year. In Q3, the gross profit margin rose significantly, from 25% in Q3 2021, to 28%. This was largely driven by improved net pricing, sourcing and product mix.

Adjusted selling and distribution expenses (S&D) for the ongoing business operations increased from EUR 167 million (9M 2021) to EUR 219 million over the first nine months of this year. As a percentage of sales, this marks an increase from 21.7% to 24.9%. Marketing and last mile costs as a percentage of sales increased, in part due to a year over year lower average basket value after the loss of paper Rx sales in H1 last year. Total Group adjusted S&D expenses were EUR 221 million for the first nine months of the year, or 25.2% of sales. In Q3 adjusted S&D expenses for the ongoing business totaled EUR 67.7 million or 23.8% of sales (Q3 2021: EUR 53.9 million, 22.7%).

Adjusted administrative expenses for the ongoing business operations grew to EUR 28.3 million from EUR 24 million (9M 2021). This equates to 3.2% of sales, and is comparable to last year’s 3.1 as a percentage of sales. Total Group adjusted administrative expenses for the first nine months were EUR 29.2 million or 3.3% of sales. These expenses exclude adjustments of EUR 19.1 million (9M 2021: EUR 6.5 million) which are predominantly made up of non-cash items for the accounting of business combinations and employee stock options.

SHOP APOTHEKE EUROPE reported an EBITDA of EUR -29 million for the first nine months of 2022, down from EUR -3.6 million over the same period last year. This year’s number includes EUR 19.9 million of adjustment items compared to EUR 8.2 million last year; the increase is predominantly due to the non-cash accounting for business combinations recorded as of Q4 2021 (full details are in the interim report), resulting from the 2021 business acquisitions. Adjusted EBITDA for the ongoing business was EUR -6.4 million (9M 2021: EUR 4.7 million), a margin of -0.7% (9M 2021: 0.6%). In Q3, the adjusted EBITDA margin for ongoing business operations was 0.9% (Q3 2021: -0.9%), which is 2.4 percentage points better than H1 2022’s margin. Adjusted EBITDA was EUR 2.7 million (Q3 2021: EUR -2.2 million).

The Group’s EBIT for the first nine months of the year was EUR -57.7 million (9M 2021: EUR -22 million). Depreciation costs over the same time period were EUR 28.6 million (9M 2021: EUR 18.4 million), while net finance costs increased marginally to EUR 10.2 million (9M 2021: EUR 9.8 million). The net loss widened to EUR 67.9 million compared to EUR 31.7 million in 2021. Adjusted net loss was EUR 48 million compared to EUR 23.5 million last year. Approximately half of the increase is due to a lower adjusted EBITDA, and half due to higher depreciation costs. Cash generated by operating activities remained positive, at EUR 0.3 million (9M 2021: EUR 28.4 million) and investment cash flow was EUR -122.6 million (9M 2021: EUR -70.9 million). Excluding EUR 80 million of short-term immediately available cash investments, 9M 2022 investments including M&A stand at EUR 42.6 million.

Non-Rx growth continued in both segments.

Sales in the DACH segment (Germany, Austria and Switzerland) increased by 10% year over year in the first nine months of 2022 to EUR 679 million (9M 2021: EUR 618 million). This follows 18% year over year growth in Q3 to EUR 224 million (Q3 2021: EUR 189 million). Year to date, non-Rx sales were EUR 583 million (9M 2021: EUR 508 million), and Rx sales were EUR 96 million (9M 2021: EUR 110 million). For ongoing business operations, the segment’s gross profit margin improved by 2.7 percentage points to 27.6%, and the adjusted EBITDA was EUR 12.5 million (9M 2021: EUR 17.6 million).

Growth in the International segment (Belgium, the Netherlands, France and Italy) remained high at 28% for the first nine months of the year, with sales rising from EUR 154 million (9M 2021) to EUR 197 million. Sales grew by 25% year over year in Q3 2022 to EUR 61 million (Q3 2021: EUR 49 million). The gross profit margin over the first nine months of the year was lower at 26.9% – compared to 27.4% (9M 2021) – with higher margins offset by product mix shifts. The International segment recorded adjusted EBITDA of EUR -18.9 million (9M 2021: EUR -12.9 million).   

Committed to sustainability – because we care.

This Q3, SHOP APOTHEKE EUROPE publicly announced its commitment to bring emissions along the entire value chain – including product emissions – to net zero by 2040. By reducing emissions along the upstream supply chain, the company aims to de-couple business growth from emissions and further contribute towards decarbonising the economy.

SHOP APOTHEKE EUROPE has been climate neutral since autumn 2020 by offsetting carbon emissions in Scope 1 and 2. SHOP APOTHEKE EUROPE now explicitly includes Scope 3 emissions, for which it has already started the first reduction initiatives. This commitment is part of SHOP APOTHEKE EUROPE’s ESG sustainability strategy: “A healthy life is only possible on a healthy planet. We take responsibility for our planet, our customers and our employees.”

Guidance.

The Management Board of SHOP APOTHEKE EUROPE reiterates the guidance for the full year 2022 for its ongoing business to grow non-Rx sales by 15% to 25% and to attain an adjusted EBITDA margin in the range of -1.5% to 1.5%.

 
ABOUT SHOP APOTHEKE EUROPE.

SHOP APOTHEKE EUROPE is one of Europe’s leading and fastest-growing online pharmacies, currently operating in Germany, Austria, France, Belgium, Italy, the Netherlands and Switzerland.

Headquartered in the Dutch logistics hub of Sevenum near Venlo with locations in Cologne, Berlin, Munich, Tongeren, Warsaw, Milan, Lille and Eindhoven, SHOP APOTHEKE EUROPE offers its customers a broad range of more than 100,000 original products at attractive prices: OTC, beauty and personal care products as well as prescription drugs, supplemented by high quality natural food and health products, low carb products and sports nutrition. Currently, 8.9 million active customers trust SHOP APOTHEKE EUROPE.

Since safe and reliable pharmaceutical advice are top priorities at SHOP APOTHEKE EUROPE, the e-pharmacy provides comprehensive pharmaceutical consulting services. In preparation for the full introduction of the electronic prescriptions in Germany, the company is continuously expanding in the area of digital health services.

SHOP APOTHEKE EUROPE N.V. has been listed on the regulated market of the Frankfurt Stock Exchange (Prime Standard) since 2016 and is part of the SDAX stock index.