DocMorris strengthens path to profitable growth in third quarter; slightly reduced revenue outlook – Biotech Investments

Frauenfeld, 19 October 2023

Press release
Ad hoc announcement pursuant to Art. 53 LR

DocMorris strengthens path to profitable growth in third quarter; slightly reduced revenue outlook

• Third quarter confirms path to profitable growth and forms basis for revenue increase in the fourth quarter
• EBITDA outlook narrowed; 2023 revenue expectation slightly reduced due to paper prescription business
• Strong acceleration of redeemed e-prescriptions and participating medical practices

DocMorris was able to further strengthen its basis for sustainable, profitable growth in the third quarter of 2023. Compared to the second quarter, the company again achieved slight growth. Compared to the previous year, the reduction in revenue in the third quarter was also significantly lower at 4.5 per cent in local currency. In the first nine months, external revenue^[1] fell by 13.5 per cent in local currency to CHF 757.5 million.

Overall, DocMorris continued to focus on its action plan to further strengthen its sustainable basis for profitability and revenue growth. In Germany, external revenue decreased by 4.7 per cent in local currency in the third quarter, OTC external revenue decreased by 2.0 per cent (second quarter: decreased 10.7 per cent). Revenues from prescription medicines based on paper prescriptions declined by 16.9 per cent in local currency, which was below expectations. In the Southern European marketplace business, sales decreased as expected by 11.9 per cent in local currency in the third quarter.

Due to the focus on potential e-prescription customers in Germany, especially with a chronic medication need, the number of active customers^[2] as of the end of September 2023 is 8.8 million (minus 0.2 million compared to the previous quarter).

Doubling of redeemed e-prescriptions since June 2023
In Germany, the nationwide e-prescription rollout continues to accelerate. The number of redeemed e-prescriptions has doubled since June and already amounts to around 5 million^[3]. The number of medical practices issuing e-prescriptions increased to over 11,000³, which corresponds to over 10 per cent[4] of all medical practices. The Federal Ministry of Health (BMG) has reinforced the mandatory use of e-prescription as of January 2024^[5] . Discussions with the BMG and gematik regarding the NFC-enabled eGK (electronic health card) solution are proceeding very constructively. DocMorris expects that this fully digital redemption channel will be implemented in practice by the end of 2023 at the latest.

Outlook
For 2023, the management narrows its EBITDA targets communicated in March. Due to the weaker development of the paper prescription business, DocMorris slightly adjusts its revenue expectations.

• For the full year, a high single-digit percentage decline in external revenue in local currency (from previously mid-single-digit percentage), with revenue growth in the fourth quarter
• Improvement of EBITDA (adjusted) to between minus CHF 30 million and minus CHF 40 million (from previously between minus CHF 20 million and minus CHF 40 million).
• Capital expenditure of between CHF 30 million and CHF 40 million.

For 2024, DocMorris continues to expect to break-even on adjusted EBITDA, excluding e-prescriptions. In the mid-term, an adjusted EBITDA margin of 8 per cent continues to be targeted.
 

The revenue and operating result of the Swiss business will no longer be consolidated from the sale to the Migros subsidiary Medbase.

Investors and analyst contact
Dr. Daniel Grigat, Head of Investor Relations & Sustainability
Email: ir@zurrose.com, phone: +41 58 810 11 49

Media contact
Torben Bonnke, Director Communications
EMail: media@zurrose.com, phone: +49 171 864 888 1

Agenda

DocMorris
The Swiss-based DocMorris AG is a leading company in the fields of online pharmacy, marketplace and professional healthcare with strong brands in Germany and other European countries. As Germany’s largest online pharmacy, it operates DocMorris, the best-known health platform. Deliveries are mainly from the highly automated logistics centre in Heerlen, the Netherlands, with a capacity of over 27 million parcels per year. In Spain and France, the company operates the leading marketplace for health and personal care products in Southern Europe. With its business model, DocMorris offers its patients, customers and partners a broad range of products and services. In doing so, DocMorris is pursuing its vision of creating a digital health ecosystem for everyone to manage their health in one click. The company was renamed from Zur Rose Group AG to DocMorris AG in May 2023 after the Swiss business was sold to Migros/Medbase. Excluding the Swiss business, about 2,200 employees in Germany, the Netherlands, Spain, France and Switzerland generated an external revenue of CHF 1,159 million serving around 10 million active customers in 2022. The shares of DocMorris AG are listed on the SIX Swiss Exchange (securities number 4261528, ISIN CH0042615283, ticker DOCM). For further information, please visit corporate.docmorris.com.

^[1] External revenue consists of the consolidated revenue of DocMorris plus online revenues of pharmacies supplied by DocMorris, less the consolidated revenue from supplying them

^[2] Customers supplied by DocMorris, either directly or through its partners

^[3] Source: gematik

^[4] Source: Kassenärztliche Bundesvereinigung (KBV)

^[5] Letter of 20 September 2023 from the BMG to the shareholders of gematik