Redcare Pharmacy: strong Q3 growth combined with 2% adj. EBITDA margin. Rx momentum in Germany further increased, with sales growth of over 130% in October.

Total Group sales growth 21% in Q3 to EUR 575M and 34% year to date to EUR 1.7bn after nine months.

• Non-Rx sales growth 20% in Q3 to EUR 383M (9M growth 20% to EUR 1.2bn); Rx sales growth 23% in Q3 to EUR 191M (9M increase 80% to EUR 518M).
• Rx sales in Germany alone grew 81% in Q3 to 69M and reached EUR 157M year to date.  The momentum further increased into the start of Q4 with growth accelerating to over 130% in October.
• Positive adj. EBITDA margin of 2% in Q3 and 2.3% year to date.
• On track to deliver all elements of the FY2024 guidance.

Sevenum, the Netherlands, 5 November 2024. Redcare Pharmacy published final sales and earnings numbers for Q3 today. Total Group sales for the first nine months of the year were confirmed at EUR 1.7 billion, an increase of 33.8% year over year (9M 2023: EUR 1.3 billion). Adjusted EBITDA of EUR 11.4 million was reported for Q3 and EUR 38.2 million for the year-to-date period, leading to a margin of 2.3% (9M 2023: 2.9%). Compared to the prior year, the Group increased marketing campaigns following the mandatory nationwide adoption of the e-prescription in January and the launch of CardLink in May. The success of the campaigns, as seen in the initial metrics for e-Rx customers and orders, led to a decision to further step up marketing at the start of Q4. The 2024 full-year guidance was updated on 3 October (full details below).

CEO of Redcare, Olaf Heinrich, comments: “We are getting great traction in Germany on e-Rx from new and existing customers. Already as many as 90% of our e-Rx customers are using the fully digital journey with CardLink in our app.”

In terms of sales value, Redcare Pharmacy’s share of the prescription market in Germany is estimated to have doubled from 0.27% in January 2024 to 0.55% by the end of the third quarter.

Jasper Eenhorst, CFO of Redcare Pharmacy, adds: “After nine months into the year, our sales growth stands at 34% year over year to EUR 1.7 billion. Throughout the year we increased marketing into the Rx opportunity in Germany and decided to further accelerate in Q4. We are on track to deliver the full-year guidance in all its elements.”

The Group’s total active customer base increased by 1.1 million year to date to 11.9 million by the end of the third quarter. At the end of Q3 there were 1.4 million more active customers than last year and 0.4 million more than at the end of Q2. The net promoter score, an indication of customer satisfaction, continued to be strong, measuring 69 in Q3 and year to date (9M 2023: 73).   

 Sales and earnings by segment.

Sales in the DACH segment comprising Germany, Austria and Switzerland grew 35.8% in the first nine months of the year to EUR 1.4 billion (9M 2023: EUR 1 billion). Excluding MediService, sales increased 21.5% year to date. Non-Rx sales in the DACH segment were 18.3% higher year over year at EUR 858.5 million (9M 2023: EUR 725 million), while Rx sales were up 79.8% at EUR 517.5 million (9M 2023: EUR 288 million). Prescription sales in Germany grew 80.6% to EUR 69 million in Q3 (Q3 2023: EUR 38 million) and 42.3% year to date. Adjusted EBITDA was EUR 49.7 million (9M 2023: EUR 52 million), leading to an adjusted EBITDA margin of 3.6% (9M 2023: 5.2%).

Sales in the International segment (Belgium, the Netherlands, France and Italy) grew 25.7% year to date to EUR 319.4 million (9M 2023: EUR 254 million). The segment reported adjusted EBITDA of EUR -11.5 million (9M 2023: EUR -15 million) and an improved adjusted EBITDA margin of -3.6%, compared to the prior year’s -6.0%.

Update on financial developments.

The Group’s gross profit for Q3 was EUR 133.3 million (Q3 2023: EUR 109 million), an increase of 21.9% year over year. In the nine months ending September, gross profit increased by 23.9% to EUR 395.3 million (9M 2023: EUR 319 million) while the gross profit margin for the period was 23.3% (9M 2023: 25.2%). Excluding MediService, which is consolidated since mid-May 2023, the gross profit margin this year was 28% (9M 2023: 28.2%), reflecting the impact of more prescription sales in Germany. 

Adjusted selling, distribution and administrative expenses (SD&A) increased to EUR 357.6 million (9M 2023: EUR 282 million). As a percentage of sales, SD&A expenses were 21.1% relative to the prior year’s 22.2%. Excluding MediService, SD&A expenses as a percentage of sales were up 0.4pp to 25.6% year to date. Increased marketing and average wage rates were partially offset by scale and efficiency.

Year-to-date EBITDA for the Group was EUR 35.1 million, up from EUR 27 million in 9M 2023. Adjustments for the nine months to September were EUR 3.1 million (9M 2023: EUR 10 million), of which EUR 2.5 million were for non-cash expenses (9M 2023: EUR 9 million). With adjusted EBITDA at EUR 38.2 million (9M 2023: EUR 37 million), the Group recorded an adjusted EBITDA margin of 2.3% (9M 2023: 2.9%). In Q3, adjusted EBITDA was EUR 11.4 million (Q3 2023: EUR 15 million), and the margin 2% (Q3 2023: 3.2%).  

Year to date, depreciation increased to EUR 50.5 million from EUR 39 million in 9M 2023, resulting in EBIT of EUR -15.4 million (9M 2023: EUR -12 million). The increase in depreciation was driven by higher investments in recent years, as well as the strategic partnership with Galenica in MediService. Net finance and tax costs were EUR 4.7 million (9M 2023: EUR 6.7 million). The Group’s net result year to date was EUR -20.1 million (9M 2023: EUR -5 million).

At the end of the nine-month reporting period, cash and short-term financial assets were EUR 210 million, up from EUR 204 million at the end of December 2023.

Construction gets underway in Czech Republic.

On 30 October, the construction for the additional distribution centre in Czech Republic officially commenced. The facility will ensure faster delivery to customers in Austria to further strengthen customer satisfaction.

Guidance for full year 2024.

The guidance updated and published on 3 October is unchanged and as follows:

• Total sales increase to EUR 2.35-2.5 billion.
• Non-Rx sales growth 20-25%.
• MediService to grow by lower half of single digits.
• Adjusted EBITDA margin of 1.2% to 2.2%.

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

Summary

Investor Relations Contact:

Monica Ambrosi (Associate Director, Investor Relations)

Press Contact:

Sven Schirmer (Director, Corporate Communications)

About Redcare Pharmacy

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 almost 12 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.