The Zur Rose Group accelerates growth

EQS Group-News: Zur Rose Group AG / Key word(s): Development of Sales
21.01.2021 / 07:00

Press release

The Zur Rose Group accelerates growth

- Revenue up 23.6 per cent in fourth quarter and 14.4 per cent in the full year 2020

- Growth in all markets accelerates quarter on quarter

- Number of active customers across the group rises to 10.5 million

- DocMorris to become the umbrella brand for the European healthcare ecosystem

- DocMorris+ healthcare platform and launch of the app represent strategic milestones

- Digital healthcare platform of Zur Rose Group, Allianz Care, CSS and Visana sets new standards in Swiss healthcare

- 2020 profit outlook confirmed

The Zur Rose Group exceeded its ambitious growth targets for 2020. Revenue rose sharply to CHF 1,751.9 million (including Medpex and Apotal^[1]). This is equivalent to growth of 14.4 per cent in local currency terms. The fourth quarter of 2020 saw growth accelerate to 23.6 per cent year on year in local currency terms with revenue of CHF 506.7 million, well ahead of the previous quarter (July to September). By the end of 2020 the number of active customers^[2] had risen by more than 50 per cent year on year to 10.5 million, a gain of 700,000 on the quarter.

Considerable growth in all markets
The Group saw a sharp year-on-year rise in revenue in the fourth quarter in all markets. In Germany, revenue (including Medpex and Apotal) was up 29.8 per cent in local currency terms. For the year as a whole, growth was 16.5 per cent in local currency terms. In the Swiss home market Zur Rose increased revenue by 10.0 per cent in the fourth quarter and 7.1 per cent in the full year, a growth rate well in excess of the market. The marketplace business in the Europe segment also grew strongly, with revenue rising 60.3 per cent in local currency terms in the fourth quarter. Over the year as a whole, growth was 73.5 per cent, with a peak seen during the lockdown in spring 2020.

DocMorris is the umbrella brand for the Zur Rose healthcare ecosystem
The Zur Rose Group is moving step by step from being a pure mail-order pharmacy to Europe's digital healthcare ecosystem. The first key building blocks of the ecosystem are the telemedicine provider TeleClinic acquired in 2020 and the cooperation with Novo Nordisk announced in January 2021 to improve the health journeys of people with obesity. The Zur Rose Group is emphasising this strategic orientation with a new brand architecture: DocMorris, the best known pharmacy brand in Germany, will be the umbrella brand for the intended European healthcare ecosystem. As a first step in implementing the new brand architecture, the DocMorris pharmacy and the DocMorris+ healthcare platform in Germany have adopted a new brand identity with a green heart as icon and a symbol for health. The varying shades of green for the heart reflect the variety of current and future services, which can be made even more convenient, personal and individual thanks to digitalisation: advice, drug therapy safety, chronic patient care, electronic prescriptions and medication plans. The new brand and its visual design with all its variants will be launched and adopted in stages in all core markets except Switzerland by 2026.

DocMorris advertising film achieves over 147 million views around the world
The new brand identity of DocMorris got off to an emotional start when the Zur Rose Group launched the DocMorris Christmas story "#TakeCare" https://www.youtube.com/watch?v=2N2eSsIWtNI. The ad went live in Germany, Spain, France and Switzerland in early December 2020, and achieved more than 147 million views worldwide, including 28 million views on YouTube, 109 million on Facebook and 10 million on other channels, making it one of the most watched online Christmas videos in the world.

Launch of the DocMorris+ healthcare platform
A new business model and a new era in health care provision in Germany started in December 2020 with the launch of DocMorris+. This platform provides easy and convenient access to all healthcare services in one place - from diagnosis with an online doctor to the drug or healthcare products needed. For the first time, customers can manage their health with a single app. The launch of the DocMorris+ app is a strategic milestone on the path towards an integrated healthcare platform. In the start phase the focus is on the capabilities of the partner network and OTC orders by mail order. As the platform grows, faster delivery options will be available to customers. Once a relevant volume of e-prescriptions has been generated, the tried-and-tested e-prescription module will also be activated.

eHealth-Tec wins tender for the specialist e-prescription service as a partner to IBM
In November 2020 gematik, the software service provider of the German Federal Ministry of Health, awarded the contract for the specialist e-prescription service in Germany to IBM. Zur Rose subsidiary eHealth-Tec is involved in the implementation as a partner to IBM. This was based on the tender by gematik for the "provision of development services, computer centre infrastructure, system hardware and software as part of the launch of e-prescriptions". eHealth-Tec contributed with its accumulated experience as a systems provider for e-prescription solutions to the IBM bid. The implementation includes supplying the necessary infrastructure and operating and supporting the hardware and software components to be able to process the entire volume of e-prescriptions generated in Germany. The successful participation in the tender reinforces the role played by the Zur Rose Group as a pioneer in systematically introducing electronic prescriptions in Germany.

Online consultations at TeleClinic rise by 500 per cent
Zur Rose subsidiary TeleClinic expanded its position as Germany's leading telemedicine provider considerably in 2020. The number of consultations carried out over the telemedicine platform grew five-fold year on year. The increased patient demand was primarily due to the coronavirus pandemic and cost-free access for non-private patients for the first time. Thanks to its high quality standards, TeleClinic also secured its position with doctors and patients as the first port of call for digital healthcare. The offering from the Munich-based company made a major contribution towards ensuring healthcare provision across the country in 2020.

"Apps on prescription" appear in digital practices
Since October 2020 doctors in Germany have been able to prescribe not only medicines but also "apps on prescription". TeleClinic identified the potential of certified digital healthcare applications (DiGa) at an early stage and has developed the DiGa portal as the partner to the digital healthcare system in Germany. This provides doctors with an overview of applications that have been officially approved by the Federal Institute for Drugs and Medical Devices and other information relevant to treatment, giving patients easier access to medical apps. This allows both sides to benefit from the new offering. TeleClinic includes newly approved apps as a matter of priority.

Allianz Care, CSS, Visana and Zur Rose Group launch digital healthcare platform
In November 2020 insurers Allianz Care, CSS, Visana and the Zur Rose Group established a joint venture to operate a comprehensive digital healthcare platform in Switzerland. The independent company sets a new benchmark in Swiss healthcare: it is laying the foundations for digitally supported, integrated care nationwide. The platform helps customers organise their personal healthcare at all stages of treatment. Patients have access to individually tailored, quality-assured healthcare services with a single click. The platform is open to all players in the healthcare sector: insurers, doctors, hospitals, pharmacies and other providers. When officially launched in the Swiss market in the second quarter of 2021 the platform will offer easy interactive access to healthcare for all Swiss residents. The core contribution by the Zur Rose Group will be to contribute some of the technology for the platform. Parts of the Zur Rose platform will be licensed to the joint venture for this purpose. Completion and market entry are subject to approval by the relevant competition authorities.

Zur Rose increases market presence in French-speaking Switzerland
In December 2020 joint venture partners Zur Rose and Medbase, the Migros healthcare provider, opened their first shop-in-shop pharmacy in the Migros supermarket in Crissier in the canton of Vaud. Zur Rose is also keen to use its presence to boost the activities of its online pharmacy business in French-speaking Switzerland. The expansion of the online market presence was accompanied by an extensive marketing campaign which saw unprompted brand familiarity in French-speaking Switzerland almost double to 26 per cent.

Outlook
The Zur Rose Group confirms the profit forecast for 2020: the expectation is to break even at the adjusted EBITDA level before expenditure on additional growth initiatives, especially in electronic prescriptions and European opportunities. From this year onwards the Group expects considerable growth in prescription drugs and confirms the medium-term revenue outlook of more than CHF 3 billion. The medium-term EBITDA margin target, adjusted for growth initiatives, is around 8 per cent. The introduction of mandatory electronic prescriptions from 2022 and the implementation of the healthcare ecosystem are also creating relevant potential for revenue and profit.

The Annual Report 2020 will be published on 18 March 2021.
The Zur Rose Group is planning to hold a Capital Markets Day in the second quarter of 2021. The precise date and agenda will be announced at a later date.

The elimination of revenue between markets and business models is not shown separately.

Investors and analyst contact
Christoph Herrmann, Head of Investor Relations
Email: ir@zurrose.com, phone: +41 58 810 11 49

Media contact
Lisa Lüthi, Head of Group Communications
Email: media@zurrose.com, phone: +41 52 724 08 14

Agenda
18 March 2021 2020 Full-Year Results
20 April 2021 First Quarter Trading Update
29 April 2021 Annual General Meeting
19 August 2021 Half-Year Results
21 October 2021 Q3 Trading Update

Zur Rose Group

The Swiss Zur Rose Group is Europe's largest e-commerce pharmacy and one of the leading medical wholesalers in Switzerland. It also operates the leading marketplace in southern Europe for consumer health, beauty and personal care products commonly sold in pharmacies. The company is internationally present with strong brands, including Germany's best-known pharmacy brand DocMorris. Zur Rose employs more than 1,800 people at sites in Switzerland, Germany, the Netherlands, Spain and France. In 2020 it generated revenue of CHF 1,752 million (including Medpex and Apotal) and currently has 10.5 million active customers in core European markets.

With its business model, the Zur Rose Group offers high-quality, safe and cost-effective pharmaceutical care. It is also characterized by the continuous further development of digital services in the field of drug management using AI-supported applications and new technology. Zur Rose is furthermore actively driving ahead its positioning as a comprehensive provider of healthcare services. By creating a digital healthcare platform - the Zur Rose ecosystem - it networks products and digital services from qualified providers. The contribution made by Zur Rose will be to take these offerings to customers and patients and to make a relevant selection. The aim is to provide people with a seamless accompaniment and empower them to manage their own health optimally using products and digital solutions.

The shares of Zur Rose Group AG are listed on the SIX Swiss Exchange (securities number 4261528, ISIN CH0042615283, ticker ROSE). For further information please see zurrosegroup.com.

^[1] As the separation of the mail-order business has not yet been completed, Medpex and Apotal had only a minor impact on the consolidated revenue of the Zur Rose Group.
^[2] Customers supplied by the Zur Rose Group, either directly or through its partners.

End of Media Release