Market environmentBusiness performance
The Zur Rose Group further advanced its acquisition strategy in 2018: With apo-rot and medpex, it took over the mail-order activities of two major e-commerce pharmacies in the German market, whilst adding the Spanish PromoFarma, the leading marketplace for standard pharmaceutical products in southern Europe. Overall, the Group managed to further strengthen its European market leadership.
Significant expansion of market position in Germany
The Zur Rose Group managed to increase sales in Germany in local currency by 33.7 percent to EUR 581.3 million. In Swiss francs growth stood at 38.9 percent. The online over-the-counter (OTC) business grew significantly by 72.5 percent in local currency terms, while growth in the prescription drugs segment (Rx) stands at 5.0 percent.
Consolidation in Germany
The Zur Rose Group leveraged the opportunities presented by consolidation of the largest mail-order market, Germany, in the reporting year. In May 2018, it announced the acquisition of apo-rot’s mail order business in Hamburg. In 2017, the pharmacy generated sales of approx. EUR 100 million. The takeover was completed in October 2018 and since the beginning of November the Zur Rose Group has handled the mail-order activities of apo-rot B.V. through the logistics infrastructure at the site in Heerlen (Netherlands). This measure represents the first step by the Group towards bundling its entire mail-order activities for the German market in Heerlen.
In October 2018, the Zur Rose Group announced the takeover of mail-order activities from Germany’s third largest online pharmacy medpex. Over the past three years, the pharmacy has posted significant organic sales growth on the back of sustained profitability. In 2017, the mail-order business generated sales of EUR 139 million. medpex focuses on non-prescription drugs and pharmacy-exclusive cosmetics and targets a young customer group with considerable purchasing power. The company has extensive experience in digital marketing and agile platform development. In January 2019, the Zur Rose Group completed the takeover of mail-order activities from medpex. Under the terms of this transaction it acquired Comventure GmbH in Forst (Germany), Vision-runner GmbH in Mannheim (Germany), medpex wholesale GmbH in Ludwigshafen (Germany) and Apotheke esando B.V. in Venlo (Netherlands).
As a result of past acquisitions, the Zur Rose Group increased its mar-ket share in the drugs mail-order business in the core market of Germany from 18 to 31 percent. Thus, it is overall ideally positioned to leverage the opportunities presented by increasing digitalisation.
Increase in logistics capacity at Heerlen site
Buoyed by the plans to bundle mail-order activities at one site, the Board of Directors of the Zur Rose Group has resolved to expand the logistics infrastructure and construct a new building to adjoin the existing one in Heerlen. The new logistics building covering more than 20,000 square metres will be ready for occupancy in 2021. The shipping capacity of the site will accordingly be tripled to a volume of 30 million packages per year. The logistics can be increased in a further expansion phase to a package volume of 50 million. After completion, the entire mail-order business for the German market will be processed in Heerlen. Streamlining at one site will enable the Zur Rose Group to scale back logistics costs significantly. The expansion of logistics will set new standards as regards efficiency in the European pharmacy mail-order business.
Logistics services at the Halle site
Ulrich Nachtsheim, owner of the pharmacy Zur Rose, and Zur Rose Pharma have agreed to postpone the succession solution for supplying their mail-order customers communicated in November 2017. On withdrawal from the mail-order business, Ulrich Nachtsheim was keen to offer his customers an adequate solution for their future supply. Due to the ongoing consolidation and strong OTC growth in the German mail-order market, this is currently not possible in the preferred form. Cooperation with Zur Rose Pharma will therefore be continued and the expansion of the location in Halle as a competence centre for marketing and services in the healthcare sector will be rigorously pursued.
Implementation of expansion strategy in new markets
With the takeover of the Spanish e-commerce marketplace PromoFarma in September 2018, the Zur Rose Group is driving forward the own digital transformation of its business. In addition, PromoFarma is a spring-board for the Group’s international expansion, both cross-border and through the addition of new partners in other countries, with a capital-efficient business model. The initial focus is on France and Italy. At the same time, the Zur Rose Group will use the major technology know-how of PromoFarma to set up an e-health platform. The goal is to offer various health services, including those of third parties, via a platform.