Half-Year Results 2017
Zur Rose Group continues on growth trajectory
The Zur Rose Group can look back on a successful first six months of 2017, in which it continued to accelerate sales growth. Following the successful IPO on 6 July 2017, Europe's largest mail-order pharmacy has the necessary funds to continue on its expansion course and to exploit the growth opportunities in the coming years.
Following the launch of its growth initiatives, the Zur Rose Group managed to increase sales by 7.2 per cent to CHF 465.8 million (8.2 per cent in local currency) in the first half of 2017, compared with the same period in the previous year. Second-quarter growth further exceeded the increase in the first quarter of 2017. With regard to its corporate strategy, the Group intends to further cement its market leadership in Germany and to initiate expansion into other European markets.
Continued growth in Germany - Thanks to intensified marketing efforts, the Zur Rose Group continued to expand its market position in Germany in the first half of 2017. Sales in the operating segment Germany increased by 12.9 per cent to CHF 226.4 million (14.9 per cent to EUR 210.4 million in local currency). This was mainly driven by DocMorris' mail-order business in non-prescription drugs (OTC), exhibiting sales growth of 42.8 per cent in local currency. DocMorris' mail-order business in prescription drugs (Rx) recorded sales growth of 7.2 per cent in local currency, accelerating growth versus the first quarter of 2017 (up 6.1 per cent on the same period of last year). The number of active customers both in OTC and Rx significantly picked up, year-on-year.
Steady sales performance in Switzerland - Thanks to positive new customer acquisitions, sales in the doctors' segment (B2B) in Switzerland rose by 5.0 per cent in the first half of 2017. Adjusted for the abandonment of insufficiently profitable sales in the Specialty Care business during 2016, the retail business (B2C) remained essentially stable. Overall sales in the operating segment Switzerland rose by 2.0 per cent to CHF 238.3 million.
Results as planned - As expected, the results were affected by growth-related marketing and personnel expenses amounting to around CHF 14 million; costs incurred in the first six months of 2017 in connection with the successful IPO amounted to CHF 5.3 million. Because of these extraordinary expenses, earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to minus CHF 11.6 million (same period of the previous year: CHF 7.8 million); net income/(loss) amounted to minus CHF 18.1 million (same period of the previous year: CHF 0.2 million).
Cooperation with Medbase and Migros - In Switzerland, Zur Rose concluded a cooperative venture with Medbase, Switzerland's largest service provider in basic outpatient medical care. In the current year, all Medbase centres will gradually switch to Zur Rose as exclusive supplier. This will enable Zur Rose to further expand its already high market share in the doctors' segment. In July 2017, Zur Rose opened the first shop-in-shop pharmacy in the Migros branch at Bern's Marktgasse. If the pilot phase proves successful, the partnership will be expanded through further in-store pharmacies. As part of the omni-channel strategy, the shop-in-shop concept is intended to promote the cross-channel purchase of drugs and so to further strengthen the retail business.
Outlook - The growth in sales achieved in the first six months gives confidence that this positive growth trend is to continue, particularly in Germany. Here, the high brand awareness of DocMorris supports new customer acquisition. In Switzerland, the close cooperation with Medbase and Migros will provide further momentum in the second half of the year. The Group management expects organic sales growth approaching 10 per cent for the full year 2017 and a negative EBITDA as a result of extraordinary expenses in the context of the IPO and the growth initiatives. A target for this year is signing of a contract for the acquisition of the business operation of a German mail-order pharmacy, subject to satisfactory due diligence and the fulfilment of certain other requirements.
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The half-year report for 2017 and the presentation relating to the half-year results are available to download at www.zurrosegroup.com | Investors & Media | Publications.
At 2 p.m. today there will be a telephone conference in English for analysts and the media.
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Investor and analyst contact
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20 September 2017 Investora Zürich; www.investora.ch
24 January 2018 Media release on revenue in 2017
24 May 2018 Annual General Meeting
Zur Rose Group
Operating under the "Zur Rose" and "DocMorris" brands, the Swiss-based Zur Rose Group is Europe's largest online pharmacy and one of Switzerland's leading 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.
Zur Rose Group is headquartered in Frauenfeld, from where it also serves the Swiss market. In Germany and Austria, the Group operates through subsidiaries in Heerlen (Netherlands) and Halle an der Saale (Germany). Furthermore, it holds a majority interest in BlueCare in Winterthur, the leading provider of networking systems in the Swiss healthcare market. Employing more than 800 people at its various locations, Zur Rose Group generated revenue of CHF 880 million in 2016.
Zur Rose Group AG's shares (ticker symbol ROSE, Swiss security no. 4261528, ISIN CH0042615283) are traded on SIX Swiss Exchange in accordance with the International Reporting Standard of SIX Swiss Exchange. The corporate bond issued in November 2012 for the purpose of financing the DocMorris acquisition is listed on the SIX Swiss Exchange (Swiss security no. 19972936, ISIN CH0199729366, ticker symbol ZRO12). zurrosegroup.com