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Redcare Pharmacy: continued very fast growth combined with major margin lift; adj. EBITDA 3.2% in Q3, vs. 0.4% last year.

Sevenum, the Netherlands, 31 October 2023. Redcare Pharmacy continued to record high, double-digit sales growth in Q3 while expanding margin performance. Total sales grew 67.1% in Q3 to EUR 475.5 million (Q3 2022: EUR 285 million), raising total year-to-date sales to EUR 1.27 billion (9M 2022: EUR 877 million) and surpassing in 9M the sales recorded for full year 2022. Excluding MediService AG in Switzerland, sales in Q3 grew 25.7% to EUR 357.6 million, and 24.3% to EUR 1.09 billion year to date. Continued strong growth and market share gains were achieved alongside a positive adj. EBITDA margin of 3.2% in Q3 (Q3 2022: 0.4%). Year to date, the adj. EBITDA margin was 2.9%. Redcare Pharmacy also continued to register steady growth in the active customer base, adding 0.4 million active customers in Q3 and 1.6 million year over year. The Managing Board confirmed the full year guidance provided on 1 August (details below).

Redcare Pharmacy’s CEO Olaf Heinrich comments: “We continue to perform exceptionally well. Our active customer base has consistently expanded and we have gained market shares. The shift to online continues in Europe; in Germany we are also happy to see that a rapidly increasing number of doctors is starting to use e-prescriptions. We are well positioned for more growth in Europe and for e-Rx in Germany”.

The customer net promoter score (NPS) reached an average of 74 in Q3 (9M: 73), the highest in a quarter so far this year. Customer loyalty also persisted, with the share of repeat orders rising to 86% (Q3 2022: 83%).

Total sales in the DACH segment (Germany, Austria and Switzerland) increased by 49.2% to EUR 1.01 billion year to date (9M 2022: EU 679 million). This number includes EUR 178 million prescription sales from MediService AG (the Swiss partnership with Galenica, whose numbers have been fully consolidated since mid-May). Total Rx sales in DACH grew by 200.4% year to date (excluding MediService, 15%), while non-Rx sales increased by 24.4%. In the International segment (France, Italy, the Netherlands and Belgium), total sales increased by 28.7% (41.1% in Q3) to EUR 254 million (9M 2022: EUR 197 million). 

Year to date, the Group’s gross profit increased to EUR 319 million (9M 2022: EUR 240 million). The gross profit margin over the same period was 25.2% compared to 27.4% the previous year. Excluding MediService, the margin was 28.2% or 0.8pp better than 9M 2022, on the back of an improved product mix. The lower gross margin at Group level in 2023 is the result of the inclusion of MediService’s prescription sales, which have lower percentual gross margins than non-Rx sales.

Adjusted selling and distribution (S&D) expenses declined significantly to 19.4% of sales (9M 2022: 25.2%). Excluding MediService, adj. S&D expenses were 22% of sales. The improvement demonstrates further gains in marketing efficiencies this year as well as increased labour productivity.

Adjusted administrative expenses were EUR 36.4 million (9M 2022: EUR 29 million). As a percentage of sales, these expenses declined from 3.3% (9M 2022) to 2.9% in 9M 2023. Excluding MediService, adj. administrative expenses were 3.1% of sales.  

Jasper Eenhorst, CFO of Redcare Pharmacy comments: “Fast growth across all our countries and increasing customer loyalty are producing the desired results in terms of cost efficiencies, alongside supply chain optimisation and productivity gains. We are well on our way to fully meet the raised guidance provided in August”.

Group EBITDA was significantly better than prior years at EUR 26.9 million (9M 2022: EUR -29 million). Adjusted EBITDA increased from EUR -9.2 million in 9M 2022 to EUR 37.3 million. A margin of 2.9% was recorded over the nine-month period (9M 2022: -1%); excluding MediService 3.1%. In Q3 Redcare Pharmacy’s adj. EBITDA was EUR 15.3 million (excluding MediService, EUR 12.9 million), compared to EUR 1.3 million in Q3 2022.

Depreciation increased EUR 10 million to EUR 38.7 million (9M 2022: EUR 28.6 million), reflecting elevated investments in recent years. Net financing costs and tax declined from EUR 10.2 million to EUR 6.7 million. This Q3 included a release (gain) with no cash impact of EUR 12.9 million due to a fair value adjustment of the contingent consideration liability related to the acquisition in 2022 of First A, later renamed GoPuls. In addition, the lower financing costs are due to positive income from interest received on cash balances this year. Total Redcare Pharmacy N.V. net loss narrowed by EUR 62.7 million to EUR -5.2 million (excluding MediService, EUR -59.7 million year to date).

The cash balance at the end of the reporting period was EUR 226 million, up from EUR 180 at 31 December 2022.

Following the corporate renaming of Redcare Pharmacy N.V. in June this year, including the change of the ticker symbol on the stock exchange to RDC, the Group successfully launched rebranded web shops for Germany and Austria in August, while retaining the local brand name Shop Apotheke.

During the past quarter, Redcare Pharmacy also welcomed Olaf Heinrich, whose tenure as the Group’s CEO began on 1 August. Olaf is driving the Group’s efforts to realise a fully digital solution for the redemption of e-prescriptions in Germany. From 1 January 2024 e-prescriptions will be mandatory.

The Managing Board of Redcare Pharmacy confirms the full year guidance raised on 1 August:

The mid- to longer-term guidance remains an adj. EBITDA margin in excess of 8%.

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.

Redcare Pharmacy continued to record high, double-digit sales growth in Q3 while expanding margin performance.