Shop pharmacy will be even more cautious for 2021 – share clearly in demand

The online drug retailer Shop Apotheke is becoming more cautious for the current year after an operating loss in the third quarter.

Shop pharmacy had to cut its orders significantly due to bottlenecks in logistics, as CEO Stefan Feltens explained in an interview with the financial news agency dpa-AFX. In addition, appropriate investments in marketing are necessary before the electronic prescription can be introduced in Germany in the coming year.

For 2021, the management board now expects sales to grow by around 10 percent, as Shop Apotheke announced when it presented detailed quarterly figures on Tuesday in Venlo, the Netherlands. This is at the lower end of the previously promised range of 10 to 15 percent.

Before interest, taxes, depreciation and special effects (adjusted Ebitda), the management expects the red figures: The adjusted operating margin should now be around minus one percent. Before that, Shop Apotheke wanted to break even here. The group had already lowered its annual targets in July due to bottlenecks in order processing and manpower.

Michael Heider from the analysis company Warburg Research rated the company’s margin forecast as disappointing. However, the introduction of the electronic prescription in Germany remains the growth driver.

CEO Feltens is also building on this technical innovation: “2022 will be a special year for us with the introduction of the electronic prescription in Germany.” According to Feltens, the company originally expected this step when it was founded 20 years ago. The next year will be about securing and gaining market share. This cannot be done without appropriate investments in the market. The company wants to get back on its clear growth path. “We have to ramp up marketing again.”

Shop Apotheke has already delivered the first orders with e-prescriptions from customers. However, not all doctors would yet meet the technical requirements. “We expect that from the middle of next year almost all prescriptions for those with statutory health insurance will be issued electronically in Germany.”

The company’s share was still one of the winners on the stock exchange during the corona pandemic last year: with an increase of a good 240 percent to around 148 euros, the share was the favorite in the MDAX, from which it had to fall in the meantime. By February 2021, the price had even risen to the record value of 249 euros. Since then, however, there has been a problem, also because of the slow introduction of the e-prescription.

Meanwhile, problems in logistics pulled the company operationally into the red in the third quarter. A tense labor market and the move to the new location in Sevenum in the Netherlands had recently led to logistics problems. The adjusted operating result was minus 2.2 million euros. In the previous year, Shop Apotheke reported an operating profit of 4.2 million euros. The bottom line is that the group is still in the red.

As has already been known since the key data was published in October, sales fell slightly in the third quarter to just under 238 million euros. The company has overcome the capacity bottlenecks, said Feltens.

While the company earned around a fifth more with non-prescription products in the first nine months, sales with prescription drugs fell by a good 30 percent due to the bonus ban in Germany. Since mid-December 2020, online pharmacies are no longer allowed to give discounts on prescription drugs.

Nevertheless, things clearly improved on the stock market. The share rose at times by 6.48 percent to EUR 138.10, making it the front runner in the SDAX small-cap index. However, since the beginning of the year, the paper has recorded a price loss of around ten percent.


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