Pre-Annual General Meeting Information • Apr 25, 2018
Pre-Annual General Meeting Information
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VENLO, 26 APRIL 2018
IMPORTANT NOTICE
The information contained in this Presentation has been provided by Shop Apotheke Europe N.V. (the "Company" and, together with its shareholders, subsidiaries and associated companies, the "Group") and has not been verified independently. Unless otherwise stated, the Company is the source of the information contained herein. For the purposes of this notice, the Presentation includes this document, its contents or any part of it and any related video or oral presentation, any question or answer session and any written or oral material discussed or distributed during the presentation meeting.
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This Presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Company, which are expressed in good faith and, in their opinion, are reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of the Company, or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the Company's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of regulators and other factors such as the Company's ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which the Group operates or in economic or technological trends or conditions. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements. It is up to the recipient of the Presentation to make its own assessment as to the validity of such forward-looking statements and assumptions.
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* IMS PharmaScope, 2017, Sempora market study, 2017, Euromonitor (as of 03-Apr-2017), online penetration calculated by dividing the internet retailing market size across Europe by the total market size for each vertical, DE and US 2015, other European markets including France, Germany, Italy, Spain, United Kingdom, Switzerland, 2016
Theresa Holler, COO and Chief Pharmacist SHOP APOTHEKE EUROPE
SAE EHS
• The Minister of Health was not appointed when the coalition agreement was signed
• The new German Minister of Health, Mr Spahn, is an advocate of digitalization in the health sector
Source: (1) Börsen-Zeitung, 13 March 2018, Article: SHOP APOTHEKE peilt 2018 Gewinnschwelle an; (2) Börse-Online, 15-21 February 2018, Article: Bittere Pille; (3) Frankfurter Rundschau, 15 February 2018, Article: Auf Druck der Apothekenlobby; (4) Bloomberg (as of 04 April 2018); (5) https://www.apotheke-adhoc.de//nachrichten/detail/markt/shop-apotheke-will-umsatz-verdoppeln/; FY2017 Annual Report
Note: (2) OTC: Prescription-free medication sold; Rx: Pharmaceuticals that require a prescription; BPC: Beauty and personal care products (3) Sales growing +44 % YoY, while market increased by 11.8 % according to the German E-Commerce Trade Association (bevh)
Michael Köhler, CEO & Founder
20 years of experience in the pharmaceutical industry (Hoechst, Aventis)
Stephan Weber, CMO & Founder >15 years of pharmaceutical and online experience; led the business since 2001
Dr. Ulrich Wandel, CFO >20 years of experience in the pharmaceutical industry
Theresa Holler, COO >15 years of experience in leading mail-order pharmacies (incl. DocMorris)
Marc Fischer, CTO & Founder >20 years of experience in the IT industry (incl. Credit Suisse, Bechtle)
Entrepreneurial management team with ample industry experience and drive to capture market share.
Source: SHOP APOTHEKE EUROPE.
*We define active customers as unique customers who are active in 12 months preceding a given period of time.
Source: (1) Sempora market research 2017; (2) IMS PharmaScope, 2017, Sempora market study, Euromonitor, 2017, online penetration calculated by dividing the internet retailing market size across Europe by the total market size for each vertical, DE and US 2015, other European markets including France, Germany, Italy, Spain, United Kingdom, Switzerland, 2016; (3) ABDA, Sempora, Euromonitor, IMS health: avg. online penetration in Europe was 2.5% for Rx and 3.5% for OTC in 2016; The avg. online penetration rate is expected to grow to 6% by 2020 in continental Europe (excl. DE)
Positive sales momentum continues in the new fiscal year 2018.
Gross Profit increased in line with revenues.
Source: SHOP APOTHEKE EUROPE.
*adjusted for one-time costs related to acqusitions
• Capex in the reporting period comprise investments in the next step in automation and increased warehouse capacity.
| Reported(3) | Analyst forecasts(4) | |||||
|---|---|---|---|---|---|---|
| In EUR `000 |
2016A | 2017A | 2018E | 2019E | 2020E | |
| Sales | 177,391 | 283,992 | 559,700 | 703,700 | 842,000 | |
| % growth | 41.3% | 60.1% | 97.1% | 25.7% | 17.94% | |
| EBITDA | (8,366) | (12,137) | 700 | 8,633 | 15,600 | |
| EBIT | (11,639) | (19,197) | (7,000) | (833) | 5,650 | |
| Total debt | 0 | 4,863 | n.a. | n.a. | n.a. | |
| Cash & marketable securities |
58,500 | 28,290 | n.a. | n.a. | n.a. |
Strong projected sales growth and operational excellence lead to an expected EBITDA breakeven in 2018E
Source: (1) Presentation on SHOP APOTHEKE FY2017 Annual Report; (2) Adjusted for one-off costs related to acquisitions (unadjusted: EUR 4.8m in FY2016); (3) SHOP APOTHEKE FY2017 Annual Report; (4) Bloomberg consensus estimate as of 03 April 2018
Due to the Company's European growth story and online pharmacy leadership, current results are not yet positive and therefore lead to a decrease of other reserves. Therefore the Company will not yet pay out dividends to its shareholders. A detailed dividend policy shall be defined when positive reserves allow for dividend payments to be made.
Presentation by Pieter-Paul Saasen Partner Audit & Assurance
BDO Audit & Assurance B.V. Eindhoven, The Netherlands
It is proposed to adopt the annual accounts 2017. On 27 February 2018, the members of the Managing Board and the Supervisory Board signed the annual accounts 2017 drawn up by the Managing Board. The annual accounts were published on 12 March 2018 and are submitted for adoption by the general meeting in this annual general meeting. BDO Audit & Assurance B.V., the Company's external accountant, has issued an auditor's report with an unqualified audit opinion, which is included in the annual accounts for the financial year 2017. The report of the Supervisory Board is also included in the annual accounts for the financial year 2017.
It is proposed by the Managing Board, with the prior approval of the Supervisory Board and in accordance with the Company's reservation and dividend policy, to allocate the results for the financial year 2017 to the Company's accumulated net loss.
Adoption and implementation of the remuneration policy for the members of the managing board and the members of the supervisory board.
Pursuant to the Dutch Civil Code, the Company is required to inform the general meeting about the implementation of the remuneration policy for the Managing Board during the past financial year. The remuneration report for the Managing Board for the financial year 2017 is included in the Company's annual report for the financial year 2017. The Company's remuneration policy for the financial year 2017 was adopted and implemented pursuant to a resolution of the general meeting on 16 May 2017. The new remuneration policy was made public on the Company's website. The proposed remuneration policy submitted to be adopted and implemented by the general meeting in this annual general meeting contains a rectification of the name of the Dutch pension fund to which the employer's contribution is paid for Theresa Holler, the Company's COO and Chief Pharmacist. The correct name is Stichting Pensioenfonds Openbare
Apothekers (SPOA).
It is proposed to adopt and implement this new remuneration policy for the members of the Managing Board and the members of the Supervisory Board for the financial years 2018 up to and including 2020.
Adoption and implementation of the management and employee stock option plan as part of the remuneration policy for the members of the managing board.
As part of the Company's new remuneration policy for the Managing Board, it is proposed by the Supervisory Board that the remuneration for the Managing Board will include the proposed management and employee stock option plan (the ESOP). The ESOP was made public on the Company's website. As part of the proposed ESOP, eligible persons, including members of the Managing Board, can be granted rights (stock options) to acquire shares in the share capital of the Company up to a maximum of 500,000 new shares for a certain exercise price, all on the terms and subject to the conditions set out in the ESOP. The proposed ESOP submitted to be adopted and implemented by the general meeting in this annual general meeting contains two amendments: (1) eligible persons include certain persons with (consulting or management) agreements with the Company or with a subsidiary as designated by the Company from time to time in its sole discretion, and (2) the exercise price of each stock option shall be such price as determined by the Managing Board, provided that the exercise price of stock options held by members of the Managing Board shall be such price as determined by the Supervisory Board.
It is therefore proposed to adopt and implement this new ESOP as part of the remuneration policy for the Managing Board for the financial years 2018 up to and including 2020.
It is proposed to grant discharge to all members of the Managing Board from liability for their management and conducted policy during the financial year 2017, insofar as the performance of such duties is disclosed in the annual accounts for the financial year 2017 or has otherwise been disclosed to the general meeting.
It is proposed to grant discharge to all members of the Supervisory Board from liability for their supervision on the (policies of the) Managing Board and the general course of affairs of the Company and its affiliated business during the financial year 2017, insofar as the performance of such duties is disclosed in the annual accounts for the financial year 2017 or has otherwise been disclosed to the general meeting.
It is proposed to re-appoint BDO Audit & Assurance B.V. in Eindhoven, The Netherlands, as the external auditor of the Company charged with the auditing of the Company's annual accounts for the financial year ending 31 December 2018.
Revocation of the current designation of the managing board of the Company as the corporate body authorised to issue shares and/or grant rights to acquire shares subject to certain conditions.
As part of the successful placement of the convertible bond earlier this month, the Managing Board resolved to grant rights to acquire shares in the share capital of the Company under its current delegated authority given pursuant to the resolution of the general meeting on 6 November 2017, equalling 19.9% of the issued and outstanding share capital of the Company.
It is proposed that the part of the current authorisation that has not been used by the Managing Board as part of the placement of the convertible bond (i.e. the 0.1%), is revoked and shall no longer be in force and effect, provided that a new authorisation is granted pursuant to and in accordance with the proposal under agenda item 11.a.
Revocation of the current designation of the managing board of the Company as the corporate body authorised to restrict or exclude the pre-emptive rights upon the issue of shares and/or the granting of rights to acquire shares as described under agenda item 10.a. subject to certain conditions.
As part of the successful placement of the convertible bond earlier this month, the Managing Board resolved to exclude the pre-emptive rights of the shareholders of the Company in respect of the convertible bond and thereby with respect to the rights to acquire the shares as referred to in the previous proposal under agenda item 10.a. under its current delegated authority given pursuant to the resolution of the general meeting on 6 November 2017.
It is proposed that the part of the current authorisation that has not been used by the Managing Board as part of the placement of the convertible bond (i.e. the 0.1%), is revoked and shall no longer be in force and effect, provided that a new authorisation is granted pursuant to and in accordance with the proposal under agenda item 11.b.
Designation of the managing board of the Company as the corporate body authorised to issue shares and/or grant rights to acquire shares subject to certain conditions.
It is proposed that the general meeting appoints the Managing Board for a period of five years as from the date of this meeting (i.e. up to and including 25 April 2023), or until such date on which the general meeting revokes or again extends the authorisation, if earlier, as the corporate body authorised to issue shares and grant rights to acquire shares, subject to the prior approval of the Supervisory Board, up to a maximum of 20% of the total number of issued shares outstanding on the date of this meeting (i.e. up to a maximum of 20% of 12,020,456 shares).
It is furthermore proposed that this authorisation is granted to the Managing Board under the explicit reservation that the general meeting reserves its rights that it is at any time during such authorisation also authorised to issue shares and grant rights to acquire shares in the share capital of the Company.
Designation of the managing board of the Company as the corporate body authorised to restrict or exclude the pre-emptive rights upon the issue of shares and/or the granting of rights to acquire shares as described in proposal 11.a. subject to certain conditions.
49
It is proposed that the general meeting appoints the Managing Board for a period of five years as from the date of this meeting (i.e. up to and including 25 April 2023), or until such date on which the general meeting revokes or again extends the authorisation, if earlier, as the corporate body authorised to restrict and exclude the pre-emptive rights accruing to shareholders in respect of the issue of shares or the granting of rights to acquire shares as described in proposal 11.a., subject to the prior approval of the Supervisory Board.
It is furthermore proposed that this authorisation is granted to the Managing Board under the explicit reservation that the general meeting reserves its rights that it is at any time during such authorisation also authorised to restrict and exclude the pre-emptive rights accruing to shareholders in respect of the issue of such shares or the granting of rights to acquire such shares.
It is proposed that the general meeting authorises the Managing Board to repurchase shares, on the stock exchange or otherwise, for a period of 18 months as from the date of this meeting (i.e. up to and including 25 October 2019), up to a maximum of 10% of the total number of issued shares outstanding on the date of this meeting (i.e. up to a maximum of 10% of 12,020,456 shares), provided that the Company will not hold more shares in treasury than a maximum 10% of the issued and outstanding share capital at any given time. The repurchase can take place at a price between the nominal value of the shares and the weighted average price on the Xetra trading venue at the Frankfurt Stock Exchange for five trading days prior the day of purchase plus 10%. This price range enables the Company to adequately repurchase its own shares, also in volatile market conditions.
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