SHOP APOTHEKE EUROPE optimistic after strong first quarter: Growth accelerated, gross margin increased.

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SHOP APOTHEKE EUROPE optimistic after strong first quarter: Growth accelerated,
gross margin increased.

- First quarter company revenues increased to 63.8 million Euros compared to
41.0 million Euros a year earlier.

- Growth rate further accelerated: plus 56 % percent in Q1 2017, following a plus
of 52 % in Q4 2016) and 41 % for the 2016 fiscal year.

- Profitable growth of 33 % in the company's biggest market, Germany, simultaneously boosts gross margin and segment EBITDA.

- International revenues more than tripled while the segment's gross margin significantly increased.

- Guidance for the 2017 fiscal year confirmed.

SHOP APOTHEKE EUROPE N.V., Europe's leading online OTC pharmacy (OTC = over the counter = non-prescription medications), has started the 2017 fiscal year dynamically, posting significant revenue growth. The company's first quarter revenues climbed to 63.8 million Euros compared to 41 million Euros during the same period the previous year. This corresponds to a 56 % increase which represents a further acceleration of growth compared to the previous quarter (Q4/2016) when SHOP APOTHEKE EUROPE had increased its revenues by 52 %. The growth rate for the 2016 fiscal year had been 41 %.

While first quarter revenues in the core segment Germany rose by 33 % year-to-year, revenues outside of Germany - consolidated in the segment International - more than tripled during the reporting period. We were able to further boost the company's strong growth rate due to the consistent acceleration of our international expansion, particularly through the successful integration of the online pharmacy FARMALINE, which was acquired in September 2016. The segment Germany services, which comprises web shop services, posted revenues of 0.3 million Euros after adjusting for intracompany services (Q1 2016: 0.4 million Euros).

As a result of the company's successful growth initiatives, the number of active customers rose substantially, from 1.4 million at the end of Q1 2016 to 2.1 million at the end of Q1 2017. In line with this increase, the number of orders grew alongside revenues by 55 % to 1.4 million (Q1 2016: 0.9 million). The rate of repeat orders remained at a consistently high level with 71% with a continuing minimal return rate of just 0.8 % while the number of site visits rose significantly, which confirms the leading online presence. Furthermore, the ratio of mobile site visits climbed by 49 % in Q1 2017.

In Q1 2017, SHOP APOTHEKE EUROPE increased its consolidated gross profit from 8.4 million Euros during the first three months of fiscal year 2016 to 13.2 million Euros in Q1 2017, an increase of 57 %. Considering the company's accelerated growth rate, the gross margin increased especially strongly in the rapidly growing International segment compared to the same reporting period last year. Whereas expenditures for the acquisition of new customers had a negative impact on segment profitability, the gross margin grew by 0.3 percentage points to 20.7 % in the segment Germany, and by even more impressive 2.9 percentage points to 20.1 % in the second core segment, International.

Economies of scale resulted in a relative decrease of administrative costs from 1.5 million Euros in Q1 2016 to 1.9 million Euros during the same period this year. In line with the expansion strategy plan, marketing expenditures (particularly for TV advertising) and extra costs related to warehouse expansion and automation affected the company's first quarter results with more than 2.0 million Euros. As a result, consolidated EBITDA decreased to -3.6 million Euros compared to -2.3 million Euros the previous year while EBIT amounted to -4.9 million Euros compared to -3.0 million Euros.

Increase in customer numbers and high rate of repeat orders drive profitable growth in Germany.

Germany, SHOP APOTHEKE EUROPE's core segment, posted profitable growth of 33 % during the first three months of 2017 compared to the corresponding time period 2016. First-quarter revenues increased to 47.5 million Euros after 35.6 million Euros the previous year. In the same period, gross profit grew 35 % from 7.3 million Euros to 9.8 million Euros. The corresponding gross margin increased by 0.3 percentage points to 20.7 % during the reporting period compared to 20.4 % a year earlier. Segment EBITDA was positive at 442K Euros during the first three months 2017 after standing at -24K Euros a year earlier.

The segment Germany Services, which comprises in- and external web shop services, also developed in a positive manner with Q1 2017 gross revenues of 1.7 million Euros compared to 1.0 million Euros in the same period last year. Gross profit for the period under review was 1.6 million Euros compared to 0.9 million Euros the previous year. Adjusted for intracompany services, the gross profit for the reporting period was at a similar level to the past year at 0.2 million Euros.

International segment continues to grow rapidly, gross profit substantially improved.

Thanks to the significantly higher number of orders, the International segment contributed strongly to the rise in revenues. 2017 first quarter International segment revenues more than tripled year-to-year, to 16.0 million Euros compared to 5.0 million Euros in Q1 2016 (+221 %). The significant increase in gross profit of 275 %, from 0.9 million Euros in Q1 2016 to 3.2 million Euros in Q1 2017 is the result of a gross margin increase of 2.9 %, from 17.2 % last year to 20.1 % in Q1 2017.

In consideration of the company's dynamic first quarter growth, the Board of Management has confirmed its forecast for the 2017 fiscal year, i.e. a 45-55 % increase in consolidated revenues, driven primarily by the strong growth in international business. Management also expects a positive impact from the overall positive market environment. A recent market research study by SEMPORA revised the expected 2016-2020 annual growth rate of the online pharmacy market upwards, from 23.7 % to 24.7 %. While SHOP APOTHEKE EUROPE'S growth strategy is focused on further extending its market leadership in the relevant European markets, the Board also expects a significant increase in profitability for the 2017 fiscal year due to economies of scale, improvements in efficiency and further automation. The consolidated gross margin is expected to increase in line with the projected growth. Furthermore, management expects an improvement of the company-level EBITDA margin to around -2 % to -3 %.
 

ABOUT SHOP APOTHEKE EUROPE.

SHOP APOTHEKE EUROPE is Continental Europe's leading online OTC pharmacy with a portfolio that focuses on OTC medication and pharmacy-related beauty and care products (BPC). The Company operates online pharmacies in Germany, Austria, France, Belgium, Italy, Spain and the Netherlands. In Germany, the TÜV-certified shop-apotheke.com is market leader. SHOP APOTHEKE EUROPE delivers a broad range of more than 100,000 original products to 2.1 million active customers quickly and at attractive prices. In addition, SHOP APOTHEKE EUROPE provides comprehensive and consistent pharmaceutical services.

SHOP APOTHEKE EUROPE generated EUR 177 million in revenues in the financial year of
2016. Headquartered in Venlo (the Netherlands), SHOP APOTHEKE EUROPE also has offices
in Cologne, Düsseldorf, Paris and Tongeren, Belgium. The online pharmacy has been listed
on the regulated market of the Frankfurt Stock Exchange (Prime Standard) since
13 October 2016.

FINANCIAL CALENDAR 2017

May 16, 2017	Annual General Meeting
July 26, 2017	Publication of the Half-Year Report 2017
November 13, 2017	Publication of the Third Quarter Results 2017

 

CONFERENCES 2017

May 17-18, 2017	Citi's European Internet and Digital Conference, London
May 22-24, 2017	Berenberg European Conference USA 2017, Tarrytown, NY
August 29-31, 2017	Commerzbank Conference, Frankfurt
September 6-8, 2017	Citi Global Technology Conference, New York
September 18-20, 2017	Berenberg & Goldman Sachs German Corporate Conference, Munich
December 04-07, 2017	Berenberg European Conference, London

MEDIA CONTACTS.

Trade and public media:
Sven Schirmer
Mobile: +49 152 28 50 63 61
E-Mail: presse@shop-apotheke.com

Financial media:
Thomas Schnorrenberg
Mobile: +49 151 46 53 13 17
E-Mail: presse@shop-apotheke.com

Investor Relations:
Dr. Ulrich Wandel
Phone: +31 77 850 6117
E-Mail: ulrich.wandel@shop-apotheke.com

 

DISCLAIMER.

This announcement contains forward-looking statements that relate to the future course of business and future financial performance, as well as future transactions or developments concerning SHOP APOTHEKE EUROPE. The bases of these statements are current expectations and assumptions of SHOP APOTHEKE EUROPE's management, of which a large number are outside SHOPE APOTHEKE EUROPE's sphere of influence. These statements are therefore subject to a variety of risks and uncertainties. If such risks and uncertainties occur, or if the underlying expectations do not materialize or the assumptions made are not correct, the actual events, both positive and negative, may differ materially from those events contained in the forward-looking statements. SHOP APOTHEKE EUROPE assumes no obligation to update these forward-looking statements or to correct them in the event of occurrences or developments other than those anticipated. Such updates or corrections are not intended.