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Successful completion of a record year for Redcare Pharmacy: growth 49%, adj. EBITDA margin up 3.7pp to 3%; guidance achieved in all its elements.

Sevenum, the Netherlands, 5 March 2024. In 2023, Redcare Pharmacy recorded a solid performance, growing sales and market share across countries, expanding its services and assortment as well as maintaining high customer satisfaction. The Group met all elements of the 2023 guidance: (i) total sales of EUR 1.8 billion (guidance range of EUR 1.7 to EUR 1.8 billion) and (ii) non-Rx sales growth of 25% (guidance range of 20% to 30%). Following positive margins in all four quarters, (iii) the adjusted EBITDA margin for the full year was 3% (guidance range of 1.5% to 3%). The company achieved (iv) a positive free cash flow of EUR 8 million (guidance range EUR -20 to EUR 20 million), which was a year-over-year increase of EUR 91 million. For the current year 2024, the Managing Board today outlined the guidance, which includes continued fast growth (to total sales of EUR 2.3-2.5 billion) and solidly positive margins (adj. EBITDA margin 2-4%). More details on the guidance below.

Redcare Pharmacy’s CEO Olaf Heinrich comments: “Our performance last year was outstanding. We achieved all our ambitious targets and made significant progress in expanding our platform capabilities, in particular NOW! and marketplace. At the same time, we served more patients and customers across Europe than ever before. As a token of our appreciation for their contribution to this success, we awarded a year-end bonus to all our employees and want to thank them for their hard work.”   

By the end of the year, Redcare Pharmacy’s active customer base stood at a record 10.8 million. The customer net promoter score (NPS) remained high, averaging 71 in 2023 (2022: 72). Customer loyalty also persisted, with the share of repeat orders at 85% for full year 2023.

Jasper Eenhorst, CFO of Redcare Pharmacy adds: “The further acceleration of the company’s already fast growth during the past years came hand-in-hand with a 3.7 percentage points increase in the adjusted EBITDA margin. That is, from a slightly negative margin, to clearly positive. Improvements were achieved across many of the individual lines of our business model. Furthermore, through a strategic partnership with Galenica in MediService, we combined online pharmacy expertise with specialty-Rx leadership in Switzerland to strengthen our future growth and earnings potential.”

Gross profit increased 32.7% year over year to EUR 440 million (2022: 24.5% growth; EUR 332 million). Following a greater share of prescription sales in 2023, largely resulting from the consolidation of MediService in mid-May, the adjusted gross profit margin was 24.5% of revenue, compared to 27.5% the prior year. Excluding MediService, the gross profit margin improved 0.6pp to 28.1%.

Adjusted selling and distribution (S&D) costs increased to EUR 336 million (2022: EUR 299 million) but as a percentage of sales improved from 24.8% to 18.7% (excluding MediService, 21.8%, a year-over-year improvement of 3pp), with favourable developments in both the DACH and the International segments. This was the result of broad-based marketing efficiencies, coupled with higher operational productivity and average basket value.  

Adjusted administrative expenses as a percentage of sales declined from 3.4% in 2022 to 2.9% in 2023 (excluding MediService 3.3%) reflecting the scale achieved. In absolute terms, adjusted administrative expenses were EUR 51.5 million (2022: EUR 41 million).

The Group’s adjusted EBITDA increased to a positive EUR 53.5 million from EUR -8 million the prior year. The adjusted EBITDA margin improved from -0.7% in 2022 to 3%. Adjustments for 2023 amounted to EUR 13.5 million (2022: EUR 21.6 million). EBITDA improved by EUR 69.7 million to EUR 40 million. Following depreciation of EUR 57.3 million (2022: EUR 40 million), the EBIT was EUR -17.3 million compared to EUR -69.2 million in 2022. After net financing costs and tax, the Group recorded a net result of EUR -11.6 million (2022: EUR -77.6 million). Excluding MediService, the net result was EUR -12.5 million.

At year-end, the total cash and cash equivalent was EUR 204 million, EUR 24 million higher than the prior year. Cash from operating activities was EUR 61 million (2022: EUR -29 million).

Total sales in the DACH segment, comprising Germany, Austria and Switzerland, grew by 54.6% year over year (22% excluding MediService) to EUR 1.45 billion (2022: EUR 940 million). Rx sales excluding MediService for the full year were EUR 150 million, an increase of 15.7% on the prior year and a return to growth (2022: -9.4%).  Including MediService, Rx sales were EUR 457 million. Non-Rx sales grew 23%, which was an acceleration on the prior year’s 15.1%. The gross profit margin for the DACH segment was 24.5% compared to 27.8% in 2022. Adjusted EBITDA improved significantly to EUR 74.8 million versus EUR 17.8 million the prior year, leading to a margin of 5.1% (2022: 1.9%).

Sales in the International segment, which includes Belgium, the Netherlands, France and Italy grew by 30.7% to EUR 345 million from EUR 264 million in 2022. Adjusted EBITDA improved from EUR -25.9 million in 2022 to EUR -21.3 million and the adjusted EBITDA margin was        -6.2%, 3.6pp better than the previous year. The gross profit margin was 24.5% (2022: 26.6%).

In June 2023, Shop Apotheke Europe N.V. became Redcare Pharmacy N.V. as the Group rebranded and renamed its corporate operations. The new name better reflects the healthcare aspect of the business and its international reach, as incorporated in its strategy. While the Group rebranded the Austrian and German webshops in September, it retained the local brand name Shop Apotheke in both of these markets. Additionally, the webshops in France and Switzerland were rebranded and renamed Redcare Pharmacie and Redcare Apotheke respectively.

Throughout 2023, the business continued to expand its platform capabilities and assortment. In the DACH region, the Group also extended its Swiss footprint into the specialty Rx market. In mid-May, a strategic partnership with the leading Swiss healthcare provider Galenica AG was finalised under the name of MediService AG. This resulted in the full consolidation of MediService’s performance in the financials of Redcare Pharmacy, which included EUR 307 million prescription sales and EUR 7.4 million adjusted EBITDA for 2023.

In January 2024, Morningstar Europe’s Sustainalytics – an independent ESG and corporate governance research, ratings and analytics company – upgraded Redcare’s ESG rating from medium risk to low risk, placing it in the upper quartile of all global companies across all sectors. The upgrade came less than a year after MSCI, also an ESG rating provider, raised the company’s ESG rating from AA to its highest category AAA. This all reflects the progress made by Redcare towards attaining its ESG targets.   

Nationwide roll-out of electronic prescriptions in Germany finally started.

The introduction of the health card (eGK) plug-in solution to redeem e-prescriptions in July last year resulted in the increased acceptance of e-Rx among healthcare professionals in Germany. Data from the gematik shows that when the electronic prescription became mandatory in January 2024, the number of medical practices issuing e-Rx rapidly accelerated and now over 75% of all doctors issue e-prescriptions. It is also estimated that approximately 70% of all prescriptions issued to patients with statutory health insurance are electronic.   

On 11 December 2023, the gematik shareholders announced their decision to develop specifications for the mobile use of the eGK without a PIN and four days later issued the first draft. A second draft was released on 25 January 2024. The gematik is expected to publish final specifications in Q1 2024. This will enable Redcare Pharmacy to align its already developed eGK NFC solution, eHealth-CardLink, to the specifications in order to receive approval for launch. Currently, patients are able to redeem electronic prescriptions at Redcare by scanning the QR-code of the printed prescription, as well as through the gematik app.

The Managing Board of Redcare Pharmacy provided the following guidance for full year 2024:

The mid- to longer-term guidance continues to be an adjusted EBITDA margin in excess of 8%.

Convocation for 2024 Annual General Meeting.

The AGM materials (including the convocation, the agenda with the explanatory notes thereto as well as other relevant documentation) are available on the corporate website of the Company, via the link:   

https://ir.redcare-pharmacy.com/en/annual-general-meeting

Originally founded in 2001, Redcare Pharmacy N.V. (formerly known as Shop Apotheke Europe N.V.) today is the leading e-pharmacy in Europe, currently active in seven countries: Germany, Austria, France, Belgium, Italy, the Netherlands and Switzerland.

Headquartered in Sevenum, close to the Dutch city of Venlo and in the heart of Europe, the company has locations in Cologne, Berlin, Munich, Tongeren, Warsaw, Milan, Lille and Eindhoven.

As the one-stop pharmacy of the future, Redcare Pharmacy offers over 10 million active customers a wide range of more than 150,000 products at attractive and fair prices. Besides OTC, nutritional supplements, beauty and personal care products as well as an extensive assortment of health-related products in all markets, the company also provides prescription drugs for customers in Germany, Switzerland and the Netherlands.

Pharmaceutical safety is of top priority. Being a pharmacy at its core, Redcare stands for comprehensive pharmaceutical consultation service. Since care is at the heart of everything Redcare does, the company provides services for all stages of life and health. This ranges from its marketplaces to unique delivery options and medication management.

Redcare Pharmacy N.V. has been listed on the Regulated Market of the Frankfurt Stock Exchange (Prime Standard) since 2016. As of 19 June 2023, the company is a member of the MDAX selection index.

In 2023, Redcare Pharmacy recorded a solid performance, growing sales and market share across countries, expanding its services and assortment as well as maintaining high customer satisfaction.