COMPANY PRESENTATION. STEFAN FELTENS, CEO EIGENKAPITALFORUM FRANKFURT NOVEMBER 27, 2019
TODAY’S AGENDA. UPDATE ON FINANCIAL INTRODUCTION PERFORMANCE BACKUP
3 SHOP APOTHEKE EUROPE IN A NUTSHELL. COMBINING OTC, BPC & RX OFFERINGS. SERVING THE WHOLE FAMILY. LEADERSHIP POSITION IN EUROPE. 8 COUNTRIES. 4.5 MILLION ACTIVE CUSTOMERS. > 1,200 EMPLOYEES. ≥ 700 M € REVENUE FORECAST 2019.
4 OUR SERVICES TODAY. OFFERING A WORLD OF HEALTH TO THE WHOLE FAMILY. APPLE STORE 8 REDPOINTS IN NO. 2 SMART FOR 5 5 COUNTRY- DOWNLOADED SPECIFIC INDICATIONS. IN MEDICAL COUNTRIES. PORTFOLIOS. CATEGORY. UNIQUE PATIENT CARE LOYALTY LEADING PORTFOLIO. PROGRAMMES. PROGRAMME. PHARMACY APP. PHARMA-CEUTICAL SAME-DAY COUNSELLING. DELIVERY. INTER- ACTION CHECKS. PHARMACEUTICAL SAFETY. 2019 5 SUCCESFUL LANGUAGES. LAUNCH.
5 OUR EUROPEAN FOOTPRINT TODAY. BENEFITTING FROM THE WIDEST PRESENCE IN THE INDUSTRY . EIGHT COUNTRIES.* 2019 ONE COUNTRY. 2014 RIGOROUSLY REVIEWING CAPITAL ALLOCATIONS AND PROSPECTS OF EACH MARKET. * Spain Exit in Dec. 2019.
6 OUR TRACK-RECORD. GROWING ORGANICALLY AND WITH SELECTIVE STRATEGIC ACQUISITIONS. 800 NET SALES* Acquisition of nu3 (DE) Venlo 700 IN EUR m Acquisition of EAV (DE) 600 IPO Frankfurt Stock Exchange Acquisition of FARMALINE 500 Launch of French webshop Start of European roll-out 400 Launch of Austrian webshop Acquisition of 300 Webshop System Provider 200 Spin-off from a local pharmacy Strong investment in online 100 leadership in Germany 0 2010 2012 2014 2016 2017 2018 2019 2010 2013 2014 2015 2016 2018 2019* *Forecast
7 OUR ADVANTAGE. LOW ONLINE MARKET PENETRATION AND CONVENIENCE WILL DRIVE EUROPEAN ONLINE PHARMACY GROWTH. Huge Addressable European Market €180bn (1) … … with Online Market Penetration still close to zero. Functional Food; €15bn Rx; €130bn €180bn ~40% OTC; €35bn ~25% ~2% Continental European US Medications Other European markets Medications Music, films & books Source: Sempora, Euromonitor, Iqvia, equity research. Note: (1) Sempora 2017. OTC is defined as non-prescription medication. BPC consist of Beauty and Personal Care Products. Rx is defined as prescription medication. Functional food is defined as food delivering additional and / or enhanced benefits over basic nutritional value. Excluding UK and certain small EU countries; countries included are: Germany, France, Italy, Spain, Poland, Romania, Netherlands, Belgium, Portugal, Czech Republic, Hungary, Sweden, Bulgaria, Denmark, Slovakia, Norway, Austria. (2) IMS PharmaScope, 2017, Sempora market study, 2017, Euromonitor (as of 3 April 2017), online penetration calculated by dividing the internet retailing market size across Europe by the total market size for each vertical, DE and US 2015, other European markets including France, Germany, Italy, Spain, United Kingdom, Switzerland, 2016. Online Market Share (2)
8 OUR ADVANTAGE. NO OTHER BUSINESS IS AS SUITABLE FOR E-COMMERCE AS THE PHARMACY SECTOR. HEALTH IS NOT SUBJECT INDIVIDUAL HEALTHCARE DESPITE A CERTAIN SEASONALITY, CROSS-SELLING POTENTIAL TO FASHION BUT IT IS IS LARGELY INDEPENDENT INDIVIDUALS USE TO AT RELATIVELY LOW AVERAGE PRODUCT A FUNCTION OF AGE. OF ECONOMIC CYCLES. HAVE AN INDISPENSABLE PRICES NEED FOR DRUGS (LOW INHIBITION AND FEEL-GOOD- THRESHOLD). PRODUCTS. SMALLEST PRODUCT SIZES, MARGINAL RETURN RATE < 1 %. HIGH CUSTOMER LOYALTY + HIGH BASKET VALUE. LOW COST PACKAGE HANDLING (WEIGHT, COMPETITIVE CUSTOMER SIZE). LIFE TIME > 40 YEARS.
9 OUR COMPETIVE ADVANTAGE. RUNNING RELEVANT DIGITAL TECHNOLOGY INHOUSE. IT & ONLINE ADVANTAGE ~50 2014 EXPERTS: EXPERTS INHOUSE • Our technology platform enables us to quickly respond to the latest developments in e-commerce. • The platform’s underlying service architecture means we can rapidly deploy new features to further improve the customer ~280 IT & ONLINE experience. 2019 EXPERTS EXPERTS: • It ensures the fast and secure connectivity of partner systems INHOUSE and external solutions to our systems. − Easier and therefore faster maintenance through smaller code base. − Improving customer experience based on our Simplified development through modular technology. state-of-the-art technology platform is a key competitive − Better and faster results by working in smaller advantage of our business model. autonomous teams that develop, deploy and improve their respective services independently.
10 OUR PERSPECTIVE. E-SCRIPTS TO BOOST SALES GROWTH AND PROFITABILITY. MUCH LOWER HANDLING COST, PAPERLESS WORKFLOW. • No mailing cost, no handling of envelopes, no scanning. • No manual corrections, easier cash collection procedures with health insurance companies. FASTER DELIVERY AS E-SCRIPTS ORDERS ARE TRANSMITTED ELECTRONICALLY. INCREASED CUSTOMER LOYALTY. HIGHER BASKET VALUE, HIGHER RETENTION RATE, INCREMENTAL MARGIN – ALL LEAD TO HIGHER CUSTOMER LIFETIME VALUE. LOWER CUSTOMER ACQUISITION COSTS: Increased convenience from a customer perspective will lead to higer conversions. In June 2019, the GSAV (law for secure supply of Several pilot studies are already running, medicines) passed both Germany’s lower house of technical implementation will follow. E- parliament (Bundestag) and the upper house (Bundesrat). scripts planned for 2020.
11 OUR STRATEGY. BEST PREPARED FOR E-SCRIPTS. INCREASE AWARENESS WITH ONE BRAND STRATEGY. • Acquisition of Europa Apotheek as RX specialist. REACH • Integration of “SMART patient care programme “ into the SHOP APOTHEKE brand. • Integration of Europa Apotheek into shop-apotheke.com – one brand. ACCESS TO E-PRESCRIPTIONS. TECHNOLOGY • Inhouse API development for digital workflow. • Active colloboration with relevant organizations. CREATE CUSTOMER BENEFITS. • Same Day Delivery Service for future acute medicine offering. BUSINESS • Partnerships with clear RX customer benefits and scale.
12 OUR NEW LOGISTICS HEADQUARTERS. MEETING FUTURE CAPACITY NEEDS. REDUCING COSTS PER PARCEL. • Groundbreaking for ~ 40,000 sqm took place on June 14, 2019. • Distance from current site just 1km. • 42 docks to speed up delivery. • Further automation of pharmacy operations to significantly reduce cost per parcel. • Established Microsoft Dynamcis ERP plus JDA Warehouse Management System for a smooth transition phase. Future operations can process up to 35 million parcels per year facilitating future e-script sales growth to take us to the next level of EUR 2 billion annual sales.
13 SHOP APOTHEKE EUROPE TODAY . CREATING THE LEADING EUROPEAN ONLINE PHARMACY. ELECTRONICS PHARMA APPAREL LEADING ONLINE BRAND LEADING OFFLINE NO SIGNIFICANT OFFLINE BRAND IN BRAND CONTINENTAL EUROPE CONTINENTAL € 105 billion € 180 billion (2) € 182 billion EUROPEAN TAM (1) Source: Euromonitor, Sempora Research. Note: 1) Continental Europe excludes the UK and certain small EU countries; countries included are: Germany, France, Italy, Spain, Poland, Romania, Netherlands, Belgium, Portugal, Czech Republic, Hungary, Sweden, Bulgaria, Denmark, Slovakia, Norway, Austria. Apparel and electronics TAM for 2014. 2) Sempora 2017. Sum of OTC, BPC, Rx, Functional Food. OTC is defined as non-prescription medication. BPC consist of Beauty and Personal Care Products. Rx is defined as prescription medication. Functional food is defined as food delivering additional and / or enhanced benefits over basic nutritional value.
14 OUR VISION: BUILDING THE FUTURE OF HEALTHCARE. Today Future PURE RETAILER HEALTH-FOCUSSED ONLINE PHARMACY. PLATTFORM PLAYER.
15 NEXT STEP. MARKETPLACE TO BE LAUNCHED IN 2020. ENHANCED VALUE PROPOSITION. BROADER BETTER FASTER PORTFOLIO. AVAILABILITY. DELIVERY.* * INCLUDING SAME-DAY We will expand our business from a pure online pharmacy retailer to a health-focused platform player.
16 INVESTMENT CASE. INVESTING IN HEALTHY GROWTH. 1 2 3 MASSIVE MARKET UNIQUE PLATFORM & AMAZING METRICS OPPORTUNITY TRUSTED BRAND €180bn addressable market > 4.5m active customers, up to 60k daily Fastest growing online shipments and >90m site visits p.a. pharmacy in continental Europe Low online penetration – c.2% Outstanding CLV – customer lifetime Shop Apotheke ranked #1 online High barriers to entry pharmacy by Webshop Awards potential of > 40yrs Strong market position of Shop Apotheke Huge SKU portfolio and superior service offering High repeat orders and no returns Attractive basket size – €72 Best online brand awareness 4 5 6 MULTIDIMENSIONAL E-SCRIPT CATALYST HIGHLY SKILLED GROWTH OPPORTUNITY MANAGEMENT Additional market penetration in Introduction of digital prescriptions Dynamic and entrepreneurial existing and new markets in Germany expected in 2020 Long-standing and visionary management team – 2 of 4 board members are founders Increase and enhance product offering Precedent countries show surge to c.10% online penetration after e-script introduction Roll-out of marketplace solution Proven track record of delivering organic sales growth > 25% Expansion of Patient Care Programmes
TODAY’S AGENDA. UPDATE ON FINANCIAL INTRODUCTION PERFORMANCE BACKUP
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