Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Redcare Pharmacy NV (SHPPF, Financial) reported a 34% increase in group sales for the first nine months, reaching 1.7 billion euros.
- The company added 0.4 million active customers in the last quarter, bringing the total to nearly 12 million active customers.
- The repeat order rate remains high at 88%, indicating strong customer loyalty.
- The company is experiencing significant growth in the German Rx market, with a 108% increase in September and over 130% in October.
- Redcare Pharmacy NV (SHPPF) is expanding its presence with a new pharmacy and distribution center in the Czech Republic to better serve Austrian customers.
Negative Points
- The gross profit margin has slightly decreased due to the impact of the Rx business, which has a lower percentage margin compared to non-Rx.
- There is a mixed impact on the gross margin due to the introduction of the e-script, which is currently only available for the statutory health insurance business.
- The company has increased its marketing expenses, which has slightly raised the cost as a percentage of sales.
- The German Rx business experienced some seasonal decline during the summer and autumn holidays.
- The company's guidance for the German Rx market remains broad, indicating uncertainty in future growth projections.
Q & A Highlights
Q: Can you provide insights on the Rx basket and its development compared to initial expectations?
A: Olaf Heinrich, CEO, explained that the Rx basket is performing as expected, with a strong basket value almost double that of the OTC basket. This indicates more than one item per order on average, aligning with their initial expectations.
Q: Are there any significant legislative changes in international markets that could impact your business?
A: Jasper Eenhorst, CFO, stated that there are no significant legislative changes affecting their business model internationally. They continue to see strong growth in some countries, like Belgium and Austria, and have reportedly become the market leader in Italy.
Q: What factors contribute to the expected acceleration in non-Rx growth in Q4?
A: Olaf Heinrich, CEO, mentioned that the expected acceleration is due to continued strength in international markets and increased marketing efforts in Germany, which are expected to benefit the non-Rx segment.
Q: How does the potential European Court of Justice ruling on Rx incentives affect your business?
A: Olaf Heinrich, CEO, explained that the case involves the ability to advertise bonuses for Rx sales. The Advocate General has recommended allowing such advertising, and a court ruling is expected early next year. The company will assess its response once the ruling is made.
Q: Can you clarify the impact of Rx and OTC mix on gross margins in the DACH region?
A: Jasper Eenhorst, CFO, noted that while Rx sales have a lower percentage margin, they also lower sales and distribution costs, balancing the overall impact. The gross margin percentage may decrease with more Rx sales, but cost efficiencies are expected to offset this.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
