Online pharmacies are a growing trend in the world of health care. They provide a convenient and affordable way for people to get the medications they need without having to go to a doctor’s office. During the COVID-19 pandemic, the ability to order medicine directly to their homes proved to be a significant advantage for patients. In the future of digitalization the trend could shift towards online medical prescriptions as its comfortable and easy for patients.
One company that can help to process this evolution is Shop Apotheke Europe NV out of Cologne, Germany.
What does Shop Apotheke do exactly?
Shop Apotheke is a pharmacy that operates over the Internet and sends orders to customers through mail and shipping companies with an online pharmacy web portal. Online pharmacies include pharmacy benefits managers and entities that administrate corporate prescription drug plans.
It’s possible to submit an electronic prescription that allows ordering medications directly to your home. Payments can be made directly online within minutes so there is no need to leave your own house.
What did Shop Apotheke’s past look like?
Investors interest started to rise in 2017 when SA did its Initial Public offering (IPO). An IPO is a private companies first sell of stock shares to the public.
What makes Shop Apotheke interesting investment option?
– EBITDA margin is between -1.5% to 1,5%, which is low. The acronym measures a company’s operating profit as a percentage of its revenue. Earnings Before Interest, Taxes, Depreciation and Amortization calculates the raw earnings before costs. A good margin is 10% meaning, 10% is clean profit.
– Average consumer price decreased from (Q2: $65,4 2021 to $61,61 Q2: 2022)
+ Constantly increasing active users
| Year and date | June 2021 | June 2022 | November 2022 |
| Active users in millions | 7,1 | 8,6 | 11,6 |
+ Expanding to Italy since August (more clients)
+ Orders and revenant customers
| Year | Q1 2019 | Q1 2020 | Q1 2021 | Q1 2022 |
| Orders in thousands | 3126 | 4170 | 5135 | 6155 |
| Revenant costumers in % | 78 | 82 | 81 | 81 |
+ Revenue in Germany
| First six months and year | 2021 | 2022 | Increase in % |
| Revenue in millions | 428,9 | 455,4 | 6,2 |
+ International revenue
| First six months and year | 2021 | 2022 | Increase in % |
| Revenue in millions | 105,5 | 136,6 | 29,5 |
Comparisons to competitiors
– Second highest revenue of all online pharmacies in Germany, Zur Rose did more (700 to 510 million in 2021)
+ Equity ratio of 53,05% to 38,2% (Zur Rose)
+ More active users than competitors f.ex Doc morris: 5,5 million, Medpex: 2,7 million
+ Zur Rose has a worse EBITDA of about -5%
Future vision
In the future Shop Apotheke will try to revolutionize electronic receipts and bring them more and more to the broad public.
For the future, the aim is to get an EBITDA of at least 8% which would be good. They also want to expand geographically to their portfolio and add more products. RX free is expected to increase by 15-25% pa, those medicaments don’t need prescriptions. For RX they are holding back predictions as there are still some legal hurdles to overcome.
In the future, I can imagine a dramatic increase in electronic RX prescriptions especially when the e-prescription is finally introuduced in Germany.
Conclusion
At the moment Shop Apotheke is not making profits but I don’t think that this is a problem regarding their bright future. It’s typical for platforms to build an active user base by investing nearly all profits in expanding. The goal is capture as large a share of the market as possible.
As an investor, this can be a bad sign as the company will not show good profits and therefore mostly no dividends for a while. Only after a big market share is acquired the company will focus more on investors.
In the future, I can see Shop Apotheke gaining a massive market share as they are continuously growing and could be a takeover target any time. Increasing active users, orders, expansions, revenant customers and revenue contribute to gaining more market share and volume.
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Important
Please note that this is not financial advice in any form and investments should only be done after research was made. Also be aware that I didtn invest in Shop Apotheke and my opinion might be biased. This article only shows my opinion and should only be viewed as a presentation not an inducement for investing.
No liability is assumed for incorrect balance sheet figures leading to an investment! Please double check all information before making an investment. Investing is at your own risk!