PHOENIX group focuses on growth and digitalisation

Mannheim, Germany: – Leading European integrated healthcare provider PHOENIX group has released results for financial year 2018/19 showing a ninth successive year of growth, outperforming international pharmaceutical markets.

For the year ending 31 January 2019, PHOENIX total operating performance (revenue plus handled volume) rose to more than €33 billion. This key figure, particularly relevant for pharmaceutical wholesale, was around five per cent above the previous year’s figure and the highest level in the company’s 25-year history.

Revenue grew by 3.6 per cent compared to previous year to around €26 billion, with sales increasing in nearly all markets, despite generally adverse conditions in pharma and healthcare markets across the 27 countries where PHOENIX group is active.

Other highlights of the 2018/19 results included:

• Improved EBITDA operating result
• Goodwill impairment in the United Kingdom
• Entry into the Romanian market
• Positive outlook for fiscal year 2019/20

Improved EBITDA

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose from €468.0 million to €471.1 million. Although the company improved its operating result compared with the previous year despite numerous one-off effects relating to optimisation programmes, the profit for the period fell to €-112.0 million, largely due to impairment losses on goodwill of around €280 million.

In the United Kingdom, the deductions in pharmacy remuneration by legislators resulted in a reduction in future earnings forecasts. PHOENIX has commenced a comprehensive optimisation programme, aimed at improving earnings in the UK in the medium term.

In the Balkan countries, changes in the market environment led to a downturn in medium-term earnings forecasts.

Consolidation

At the same time, equity increased due to an account of a capital contribution of around €335 million to over €2.8 billion. The equity ratio developed better than forecast, rising from 31.7 per cent to 33.5 per cent.

The 2018/19 results consolidate financial statements to include the companies in Romania, with around 2,200 employees, for the first time.

Oliver Windholz, Chief Executive Officer of PHOENIX Pharma SE, commented: “With the acquisition of the pharmaceutical wholesaler Farmexim and the nationwide pharmacy chain Help Net, the PHOENIX group has tapped into a new and attractive market in Romania. These companies strengthen our position as an integrated healthcare provider.”

Depth, breadth and digitalization

“With more than 2,500 pharmacies, we are leading in continental Europe and can offer our customers throughout the region attractive services and professional advice,” said Mr. Windholz.

The total number of pharmacies, which are central to PHOENIX strategy increased by more than 400 compared with the previous year.

“We base our approach on the three aspects of ‘depth, breadth, and digitalisation’, which means that we are aiming to position ourselves more deeply, with more pharmacies, and more broadly, with more services, in 27 countries while, at the same time, becoming more digital,” explained Mr. Windholz.

In doing so, the company intends to get even closer to its end customers.

Europe-wide investments

In fiscal year 2018/19, the PHOENIX group invested around €176 million in the expansion and modernisation of its pharmacy network and distribution centers, in automation technology, and in logistics services for the pharmaceutical industry.

With the ONE project, the company is building the group’s largest distribution and logistics center in the Danish town of Køge at a cost of more than €70 million. The modern high rack warehouse will offer space for around 60,000 pallets.

Digital initiatives

PHOENIX is currently establishing its new digital unit PXG Health Tech, ahead of planned launch in Summer 2019. The aim is to offer customers digital solutions across Europe.

PHOENIX also cooperates with start-ups. In the UK it has launched a pilot project is launched in the area of telemedicine, with online consultations allowing patients to obtain advice from doctors – e.g. on travel vaccinations, which they are then given at Rowlands Pharmacies.

In Germany, PHOENIX has launched the app Deine Apotheke (“your pharmacy”) to provide all German pharmacies with a package of digital services designed to support sales. The app consists of two components, allowing end customers to scan in prescriptions quickly and easily as well as pre-order drugs or health products directly from their pharmacy. Through the cooperation with PAYBACK, PHOENIX is also opening up exclusive access to Germany’s most popular loyalty programme.

Positive outlook for 2019/20

“We are in a good position to continue growing successfully in the future and to expand our market position in Europe,” stressed Oliver Windholz at the presentation of the annual results.

“Our forecast for fiscal year 2019/20 once again anticipates growth above the level of the European pharmaceutical markets. We are expecting an increase in our revenue and earnings thanks to organic and acquisition-related growth as well as improved efficiency,” he concluded.

About PHOENIX group

The PHOENIX group, headquartered in Mannheim, is a leading pharmaceutical trader in Europe. Active in 27 countries, the company offers unique geographical coverage throughout Europe, making a vital contribution to comprehensive healthcare with more than 36,000 employees. The PHOENIX group’s vision is to be the best integrated healthcare provider – wherever it is active.

The PHOENIX group provides vital links between manufacturer and patient. Pharmaceutical manufacturers, pharmacies, doctors, hospitals, health insurance funds, and patients across Europe can benefit from its service offerings. In pharmaceutical wholesale, the PHOENIX group is active with 164 distribution centers in 27 countries and supplies pharmacies and medical institutions with drugs and other health products. Numerous other products and services for pharmacy customers complete the portfolio – from assistance in advising patients to modern goods management systems to pharmacy cooperation programmes. With around 13,500 member pharmacies, PHOENIX Pharmacy Partnership is the umbrella for a European network of 13 cooperation and partner programmes in 16 countries. Pharma Services provides services across the whole supply chain for the pharmaceutical industry.

The PHOENIX group already operates around 2,500 of its own pharmacies in 14 European countries, gaining profound knowledge of the pharmacy business. The group’s approximately 18,500 pharmacy employees have around 140 million customer contacts each year, dispensing approximately 315 million drug packages to patients and advise them on issues concerning pharmaceuticals and general health.

Further information about the PHOENIX group: www.phoenix-all-in-one.eu.