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Redcare Pharmacy N.V.
Investor Presentation • May 13, 2020
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Q1 2020 EARNINGS CALL. PRESENTATION.
SHOP APOTHEKE EUROPE STEFAN FELTENS, CEO JASPER EENHORST, CFO
14 MAY 2020
TODAY'S PRESENTERS.
STEFAN FELTENS CEO SHOP APOTHEKE EUROPE JASPER EENHORST CFO SHOP APOTHEKE EUROPE
TODAY'S AGENDA.
FINANCIAL PERFORMANCE UPDATE ON BUSINESS AND STRATEGY Q+A
HIGHLIGHTS. UPDATE ON CORONA SITUATION.
Elevated demand throughout mid-May.
No major supply chain issues so far and in the foreseeable future.
Re-start of growth investments in new customer acquisition in April.
Continued heightened hygiene and tight monitoring to protect workforce and operations.
Dynamic situation with high degree of uncertainty.
HIGHLIGHTS. Q1 2020.
Strong start into the year was accelerated by additional demand in March: Consolidated revenues up + 33% to EUR 232 million (fully organic), Rx up by 23%.
Gross profit driven by improved sourcing conditions and better net pricing: Gross profit increased by + 53% to EUR 49.9 million, margin improved by + 2.8pp to 21.5%.
EBITDA break-even reached ahead of schedule: Adj. EBITDA EUR + 4.9 million (Q1 2019: EUR – 9.1 million), margin 2.1% (– 5.2%).
Positive operating cash flow: Cash flow from operating activities EUR + 12.2 million (Q1 2019: EUR – 2.3 million)
New online doctor service started: Cooperation with Zava, one of the leading online doctor services in Europe.
KEY FINANCIALS. IMPRESSIVE ORGANIC TOPLINE GROWTH. 5 MILLION ACTIVE CUSTOMERS.
OUR CUSTOMERS ARE HIGHLY SATISFIED.
65.15 €
AVERAGE SHOPPING BASKET VALUE (Q1 2019: EUR 64.92).
7
VIRTUALLY NO RETURNS.
<1%
KPIs. STRONG WEB TRAFFIC GROWTH CONTINUED.
KPIs. SHARE OF REPEAT ORDERS ABOVE 80%.
KEY FINANCIALS. EUR 14 MILLION YEAR-OVER-YEAR EBITDA IMPROVEMENT.
| (in millions of euros) | YTD Q1 Last Year and This Year |
Q3 Past Q4 vs. This Q1 |
||||
|---|---|---|---|---|---|---|
| 2019 | 2020 | Better/ (Worse) |
Q4 2019 | Q1 2020 | Better/ (Worse) |
|
| Sales | 175 | 232 | 33% | 192 | 232 | 21% |
| Gross profit margin | 18.7% | 21.5% | 2.8 pp | 19.9% | 21.5% | 1.6 pp |
| Selling & distribution as percentage of sales |
-20.9% | -16.9% | 4.0 pp | -17.7% | -16.9% | 0.8 pp |
| Administrative costs as percentage of sales |
-3.0% | -2.5% | 0.5 pp | -3.2% | -2.5% | 0.7 pp |
| Adj. EBITDA | -9.1 | 4.9 | 14.0 | -1.8 | 4.9 | 6.7 |
| Adj. EBITDA margin | -5.2% | 2.1% | 7.3 pp | -1.0% | 2.1% | 3.1 pp |
| EBITDA | -9.8 | 3.9 | 13.7 | -4.2 | 3.9 | 8.1 |
| Q4 2019 | Q1 2020 | Better/ (Worse) |
||
|---|---|---|---|---|
Adjustments in Q1 2020 of €1.1 million are mainly related to the non-cash employee stock option program
KEY FINANCIALS. GROSS MARGIN UP, DRIVEN BY SOURCING IMPROVEMENTS. HIGHER AVERAGE NET PRICE IMPACTED BY FEWER VOUCHERS AND MIX.
KEY FINANCIALS. MARKETING REDUCED DURING CORONA-DEMAND AFTER PEAK IN Q1 2019; LABOUR BETTER 0.8%.
KEY FINANCIALS. ADJUSTED EBITDA BREAK-EVEN REACHED AHEAD OF SCHEDULE.
KEY FINANCIALS. ADJ. EBITDA POSITIVE EVEN WITHOUT IMPACT OF CORONA.
KEY FINANCIALS. SOUND BALANCE SHEET.
TODAY'S AGENDA.
FINANCIAL PERFORMANCE UPDATE ON BUSINESS AND STRATEGY Q+A
FROM A PURE E-PHARMACY RETAILER …
… TO A CUSTOMER CENTRIC E-PHARMACY PLATFORM.
17
CUSTOMER-CENTRIC SERVICES. WHAT'S NEXT?
ROLLOUT IN 2020: SAME-DAY DELIVERY.
NEW IN 2020: MARKETPLACE.
NEW IN 2020: ✓ ONLINE DOCTOR SERVICE.
EXPANSION IN 2020: ✓ OWN BRANDS.
CUSTOMER-CENTRIC SERVICES. INCREASING CUSTOMER LOYALTY VALUE.
THE ROAD TO E-RX IN GERMANY.
LOOKING FORWARD. WE SLIGHTLY LIFT OUR EXPECTATION FOR ADJ. 2020 EBITDA; FULL UPDATE ON GUIDANCE WITH H1.
TODAY'S AGENDA.
FINANCIAL PERFORMANCE UPDATE ON BUSINESS AND STRATEGY Q+A
CONSOLIDATED SEGMENT FINANCIALS.
| 31.3.2020 | DACH | International | Total |
|---|---|---|---|
| EUR 1,000 | EUR 1,000 | EUR 1,000 | |
| Revenue | 200,830 | 31,156 | 231,986 |
| Cost of sales | -159,156 | -22,919 | -182,075 |
| Adjusted cost of sales | - 159,189 | -22,919 | - 182, 108 |
| Gross profit | 41,673 | 8,237 | 49,911 |
| Adjusted gross profit | 41,641 | 8,237 | 49,878 |
| % of revenue | 20.8% | 26.4% | 21.5% |
| Other income | বা | 1 | 5 |
| Selling & distribution | -30,346 | -8,878 | -39,224 |
| Adjusted S&D | -30,345 | -8,878 | -39,223 |
| Segment EBITDA | 11,331 | -640 | 10,692 |
| Adjusted segment EBITDA | 11,300 | -640 | 10,660 |
| Administrative expenses | -5.168 | -1.664 | -6,832 |
| Adjusted AE | -4.328 | -1.394 | -5,722 |
| EBITDA | 6.165 | -2.305 | 3,860 |
| Adjusted EBITDA | 6.971 | -2.033 | 4,938 |
| Depreciation | -2.535 | -816 | -3,352 |
| EBIT | 3.630 | -3.121 | 508 |
| Adjusted EBIT | 4.436 | -2.851 | 1,586 |
| Net finance cost and income tax | -5,466 | ||
| Adjusted net finance cost and income tax | -5,466 | ||
| Net loss | -4,958 | ||
| Adjusted net loss | -3,880 |
| 31.3.2019 | DACH | International | Tota |
|---|---|---|---|
| EUR 1,000 | EUR 1,000 | EUR 1,000 | |
| Revenue | 155,011 | 19,635 | 174,646 |
| Cost of sales | -127,050 | -14,979 | -142,029 |
| Gross profit | 27,960 | 4,657 | 32,617 |
| % of revenue | 18.0% | 23.7% | 18.7% |
| Other income | 1 | O | |
| Selling & distribution | -29,620 | -6,883 | -36,502 |
| Adjusted S&D | -29,620 | -6,883 | -36,502 |
| Segment EBITDA | -1,659 | -2,226 | -3,885 |
| Administrative expenses | -4.565 | -1.342 | -5,906 |
| Adjusted AE | -4.011 | -1.179 | -5,19( |
| EBITDA | -6.223 | -3.568 | -9,791 |
| Adjusted EBITDA | -5.670 | -3.405 | -9,075 |
| Depreciation | -2.724 | -801 | -3,524 |
| EBIT | -8.947 | -4.368 | -13,315 |
| Adjusted EBIT | -8.394 | -4.206 | - 12,599 |
| Net finance cost and income tax | -1,406 | ||
| Net loss | -14,721 | ||
| Adjusted net loss | - 14,005 |
CONSOLIDATED STATEMENT OF PROFIT AND LOSS.
| Period ended 31.3.2020 |
Period ended 31.3.2019 |
|
|---|---|---|
| EUR 1,000 | EUR 1,000 | |
| Revenue | 231.986 | 174.646 |
| Cost of sales | -182.075 | - 142.029 |
| Gross profit | 49.911 | 32.617 |
| Other income | 4 | 1 |
| Selling and distribution | -42.072 | -39.498 |
| Administrative expenses | -7.335 | -6.435 |
| Result from operations | 509 | -13.315 |
| Finance income | 80 | 48 |
| Finance expenses | -5.701 | - 1.496 |
| Net finance costs | -5.621 | - 1.448 |
| Result before tax | -5.112 | -14.763 |
| Income tax | 155 | 42 |
| Result after tax | -4.957 | -14.721 |
| Attributable to: | ||
| Owners of the company | -4.957 | - 14.721 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION.
| 31.3.2020 | 31.12.2019 | |
|---|---|---|
| EUR 1,000 | EUR 1,000 | |
| Assets | ||
| Non-current assets | ||
| Property, plant and equipment | 47,061 | 13,178 |
| Intangible assets | 200,595 | 199,850 |
| Deferred tax assets | 120 | 120 |
| Other financial assets | 2,500 | 2,500 |
| Investments in equity-accounted joint ventures | 1,105 | 1,105 |
| Investments in associates | 402 | 402 |
| Investments in equity-instruments | 10 | 10 |
| 251,795 | 217,165 | |
| Current assets | ||
| nventories | 55,849 | 56,688 |
| Trade and other receivables | 50,106 | 40,894 |
| Other financial assets | 43,276 | 50,581 |
| Cash and cash equivalents | 67,752 | 62,653 |
| 216,983 | 210,816 | |
| Total assets | 468,778 | 427,981 |
| 31.3.2020 | 31.12.2019 | |
|---|---|---|
| EUR 1,000 | EUR 1,000 | |
| Equity and liabilities | ||
| Shareholders' equity | ||
| lssued capital and share premium | 341,192 | 341,192 |
| Reserves/accumulated losses | - 112,935 | -108,429 |
| 228,257 | 232,763 | |
| Non-current liabilities | ||
| Deferred tax liability | 3,741 | 3,905 |
| Loans and Borrowings | 162,601 | 131,512 |
| 166,342 | 135,417 | |
| Current liabilities | ||
| Trade and other payables | 42,842 | 32,004 |
| Loans and Borrowings | 10,707 | 7,522 |
| Amounts due to banks | 4,282 | 10,167 |
| Other liabilities | 16,348 | 10,108 |
| 74,178 | 59,801 | |
| Total equity and liabilities | 468,778 | 427,981 |
CONSOLIDATED STATEMENT OF CASH FLOWS.
| Period ended 31.3.2020 |
Period ended 31.3.2019 |
|
|---|---|---|
| EUR 1,000 | EUR 1,000 | |
| Cash flow from operating activities | ||
| Result from operations | 508 | -13,315 |
| Adjustments for: | ||
| - Depreciation and amortisation of non-current assets | 3,352 | 5,723 |
| - Corporate income tax | 0 | O |
| - Share-based payment charge for the period | 442 | 692 |
| Operating result adjusted for depreciation | ||
| and amortisation, taxes and provisions | 4,302 | -6,900 |
| Movements in working capital | ||
| - (Increase)/decrease in trade and other receivables | -4,212 | -5,597 |
| - (Increase)/decrease in inventory | 839 | -5,415 |
| - (Increase)/decrease in trade and other payables | 11,193 | 15,584 |
| Working capital movement | 7,820 | 4,572 |
| Net cash (used in)/generated by operating activities | 12,122 | -2,328 |
| Cash flow from investing activities | ||
| Investment for property, plant and equipment | -7,402 | -196 |
| Investment for intangible assets | -2,979 | -3,517 |
| Investment for other financial assets | 4,755 | -261 |
| Investment for acquisitions | 0 | 0 |
| Acquisition of subsidiary, net of cash acquired | 0 | 0 |
| Net cash (used in)/generated by investing activities | -5,626 | -3,974 |
| Period ended 31.3.2020 |
Period ended 31.3.2019 |
|
|---|---|---|
| EUR 1,000 | EUR 1,000 | |
| Cash flow from financing activities | ||
| Interest received | 80 | 48 |
| Interest paid | -879 | - 1,449 |
| Payment of earn-out obligations Farmaline | 0 | - 1,100 |
| Capital increase | 0 | 0 |
| lssue convertible bond | 0 | 1,059 |
| lssue other long-term liability | - 9 | - 702 |
| Cash-out lease payments | - 592 | 0 |
| Net cash (used in)/generated by financing activities | -1,399 | - 2,144 |
| Net increase/(decrease) in cash and cash equivalents | 5,097 | -8,445 |
| Cash and cash equivalents at the beginning of the period | 62,653 | 24,338 |
| Cash and cash equivalents at the end of the period | 67,750 | 15,893 |
SHOP APOTHEKE EUROPE BECAME A UN GLOBAL COMPACT SIGNATORY. STEPS TAKEN.
10 PRINCIPLES ON HUMAN RIGHTS, LABOUR, ENVIRONMENT AND ANTI-CORRUPTION.