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Zur Rose Group records 30 percent sales growth in first half of 2018 Mittwoch, 15. August 2018 - 06:45
Zur Rose Group AG / Key word(s): Half Year Results
Zur Rose Group records 30 percent sales growth in first half of 2018
15.08.2018 / 06:45
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Press release
Zur Rose Group records 30 percent sales growth in first half of 2018
- Strong growth in Germany with plus 38 percent in local currency terms
- Surge in sales of almost ten percent in home market of Switzerland
- Takeover of OTC market leadership in Germany
- Continuation of expansion strategy, including in new markets
- Growth and profit targets for 2018 confirmed
The Zur Rose Group continued its dynamic performance in the first half of
2018 with an increase in sales of just under 30 percent to CHF 602.7
million. As the largest mail-order pharmacy in Europe, it will continue to
promote organic and acquisition-based growth and take advantage of
opportunities in the market. With the acquisition of the marketplace
platform Promofarma, the Group is bolstering its internationalisation
strategy and increasing its technology competence in e-commerce.
The continued growth momentum is clearly reflected in the figures for the
first half of the year: Consolidated sales increased by 29.4 percent
year-on-year to CHF 602.7 million. In local currency terms, the increase
stood at 24.7 percent. As a consequence of the increased marketing expenses,
the Group reported an operating result (EBITDA) of minus CHF 8.7 million as
planned. This also includes non-recurring exceptional expenses in connection
with the acquisitions of around CHF 2.1 million. A net income/(loss) of
minus CHF 17.6 million was incurred.
Almost ten percent sales growth in Switzerland - In its home market of
Switzerland, the Zur Rose Group posted a significant surge in sales of 9.5
percent to CHF 262.1 million. In the light of the government-mandated price
reductions which entered into force at the beginning of the year, this
growth is even more positive. The high level of customer orientation and the
further development of digital services led to the acquisition of new
customers in the doctors' segment (B2B): Zur Rose increased its market share
to almost 25 percent in this segment. Sales increased by 7.6 percent. The
retail segment (B2C) grew by a significant 12.6 percent. This acceleration
in growth was driven in particular by the fast-growing specialty care
business and brick-and-mortar business combined with the omni-channel
strategy. In June 2018, Zur Rose opened its second shop-in-shop pharmacy at
the Claramarkt Basel Migros branch. A location at Limmatplatz in Zurich will
be added in November.
Significant expansion of market position in Germany - In Germany, the Zur
Rose Group continued its accelerated growth in the first half of the year.
Sales in local currency terms altogether increased significantly by 38.4
percent to EUR 291.2 million. The online OTC segment continued to gain in
importance and grew organically, clearly outstripping the market as a whole.
The mail-order business of the Eurapon and Vitalsana acquisitions also
performed very well. Overall, OTC sales in local currency terms rose by 77.7
percent to EUR 157.8 million, now making the Group the clear market leader
for OTC drugs in Germany. In the prescription drugs (Rx) segment, sales
increased by 9.7 percent in local currency terms, around the same level as
the previous year. The number of active customers in Germany increased by 66
percent to over three million in the last 12 months. In the light of ongoing
discussions about a ban on the mail-order business in prescription drugs,
the Group continues to believe that a ban is not in line with EU law. The
German Federal Minister of Health recently announced that he would prefer a
fair solution rather than a ban.
Implementation of expansion strategy in new markets - With the takeover of
the state-of-the-art e-commerce marketplace Promofarma as announced at the
start of August, the Zur Rose Group is driving the digital transformation of
its own business. Promofarma is a springboard for the Group's international
expansion, both cross-border and through the addition of new partners in
other countries, with a capital-efficient business model.
Ongoing consolidation in Germany - The Zur Rose Group will continue to
leverage the opportunities presented by consolidation of the largest
mail-order market, Germany. In May, it announced the acquisition of
apo-rot's mail order business in Hamburg. The pharmacy generated sales of
around EUR 100 million in 2017. The closing is expected in the fourth
quarter of 2018. The logistics of apo-rot are to be transferred to Heerlen
at the end of the year. This measure represents the first step by the Zur
Rose Group towards bundling its entire mail-order activities in the German
market in Heerlen. As a result of the synergy effects, the management
expects a contribution margin of the acquired sales of five to ten percent.
Increase in logistics capacity at Heerlen site - Buoyed by these plans, the
Board of Directors of the Zur Rose Group has resolved to expand the
logistics infrastructure and construct a new building to adjoin the existing
one in Heerlen. The new logistics building covering more than 20,000 square
metres will be ready for occupancy in mid 2020. The shipping capacity of the
site will accordingly be tripled to a volume of 30 million packages per
year. The logistics can be increased in a further expansion phase to a
package volume of 50 million. After completion, the mail-order business of
Eurapon, Vitalsana and Zur Rose Pharma as well as any other acquired
mail-order pharmacies will be processed in Heerlen. Streamlining at one site
will enable the Zur Rose Group to scale back logistics costs significantly.
The expansion of logistics will set new standards as regards efficiency in
the German pharmacy mail-order business.
Outlook - Management has confirmed further double-digit organic sales growth
for 2018 and an overall increase of more than 20 percent in local currency
terms. At the EBITDA level, a break-even result adjusted for extraordinary
expenses is still expected. The Zur Rose Group will continue its long-term
growth strategy and achieve further expansion of its strong position in the
European drugs mail-order business. To this end it is relying on a
high-quality, cost-effective supply of medicines, a high level of customer
focus and the further development of digital services. Economies of scale
due to the growing size, further automation in logistics and the integration
of the acquired companies are paying off systematically and exerting a
positive effect on the operating result.
Sales figures, January to June, in CHF 1.1.-30.6.20- 1.1.-30.6.20- Chang-
1,000 18 17 e
Zur Rose Group 602,706 465,763 29.4%
in local currency - - 24.7%
organic - - 11.6%
Segment Switzerland 262,121 239,341 9.5%
B2B 193,609 179,997 7.6%
B2C 65,609 58,270 12.6%
BlueCare 2,903 1,074(1) n.a.
Segment Germany 340,585 226,422 50.4%
Rx 156,037 130,856 19.2%
OTC 184,548 95,566 93.1%
Segment Germany, in EUR 1,000 291,192 210,362 38.4%
Rx 133,408 121,575 9.7%
OTC 157,784 88,787 77.7%
1) consolidated as of 1 May 2017
Further key financials, in CHF 1,000 1.1.-30- 1.1.-30- Cha-
.6.2018 .6.2017 nge
Earnings before depreciation and amortisation -6,597 -6,264 n.m-
(EBITDA) adjusted for extraordinary costs .
in % of revenue -1.1% -1.3%
EBITDA -8,743 -11,551 n.m-
.
Earnings (EBIT) adjusted for extraordinary costs -14,345 -11,670 n.m-
.
in % of revenue -2.4% -2.5%
EBIT -16,491 -16,957 n.m-
.
Net income / (loss) adjusted for extraordinary -15,448 -12,805 n.m-
costs .
in % of revenue -2.6% -2.7%
Net income / (loss) -17,594 -18,092 n.m-
.
30.6.2018 31.12.2017 Change
Equity 277,765 294,004 -5.5%
in % of balance sheet total 61.7% 64.4%
The half-year report 2018 and presentation are available at
www.zurrosegroup.com under "Investors & Media" | "Publications".
At 2 p.m. CET today there will be a telephone conference in English for
analysts and the media.
Dial-in numbers: UK: +442030092452 | USA: +18554027766 | CH: +41225805970 |
DE: +4969222229043
Conference ID: 63253964#
The associated presentation (without audio) is available at:
https://webcasts.eqs.com/zurrose20180815/no-audio
Alternatively, the presentation can be followed via live audio webcast using
the following link: https://webcasts.eqs.com/zurrose20180815
Investor and analyst contact
Marcel Ziwica, Chief Financial Officer
e-mail: ir@zurrose.com, telephone: +41 58 810 11 49
Media contact
Lisa Lüthi, Head of Corporate Communications
e-mail: lisa.luethi@zurrose.com, telephone: +41 52 724 08 14
Agenda
24 October 2018 Q3 Trading Update
23 May 2019 Annual General Meeting
About the Zur Rose Group
Operating under the Zur Rose and DocMorris brands, the Swiss-based Zur Rose
Group is Europe's leading online pharmacy and one of Switzerland's foremost
wholesale suppliers to medical doctors. Through its business model, it helps
to ensure safe, reliable and high-quality pharmaceutical care, while also
excelling in developing innovative medicines management services to increase
the effectiveness of the medication process. This creation of added value,
the strong focus on patients and the commitment to supply medication at low
cost for the benefit of payors and patients make the Group an important
strategic partner for all healthcare stakeholders.
The Zur Rose Group is headquartered in Frauenfeld, from where it also serves
the Swiss market. Customers in Germany and Austria are primarily supplied
from Heerlen (NL). Furthermore, the Group holds a majority interest in
BlueCare in Winterthur, the leading provider of networking systems in the
Swiss healthcare market. Employing more than 1000 people at its various
locations, Zur Rose Group generated revenue of CHF 983 million in 2017.
Zur Rose Group AG's shares (Swiss security no. 4261528, ISIN CH0042615283,
ticker symbol ROSE) are traded on SIX Swiss Exchange. The corporate bond
issued in July 2018 is listed on the SIX Swiss Exchange (Swiss security no.
42146044, ISIN CH0421460442, ticker symbol ZR018). More information at
zurrosegroup.com.
