Galenica and Shop Apotheke Europe enter into a strategic partnership and establish the leading online pharmacy in Switzerland

With Shop Apotheke Europe, Galenica has gained a strong partner for its pure online business and can grow faster and stronger in this area with the joint venture. As an international partner with an attractive online platform, Shop Apotheke Europe ideally complements the product and service offerings of the new joint venture. In addition, the partnership offers potential synergies, for example in the areas of technology and logistics.

The strategic partnership will enable Shop Apotheke Europe to become one of the leading online pharmacies in Switzerland in a single move with the new joint venture. With Galenica, as the leading fully integrated healthcare provider in Switzerland, Shop Apotheke Europe has a strong partner with a unique network in the healthcare market. This enables Shop Apotheke Europe to position itself even more strongly in the Swiss market and to grow faster in sales and profit. With the joint venture, Shop

Apotheke Europe significantly increases its total sales, but also within it the its share of prescription medicines.

The business activities of Mediservice and shop-apotheke.ch are brought together in the joint venture. The result is a more comprehensive range of products and services that guarantee a more seamless and an even better customer experience online.
Mediservice customers continue to benefit unchanged from the comprehensive range of products and services, supplemented with the offers and services of shop-apotheke.ch. The customers of shop-apotheke.ch are given easy access to Mediservice's comprehensive range of prescription drugs and home care services.

The logistics concept remains unchanged in the first phase. Prescription medicines will continue to be shipped from the Mediservice location in Zuchwil (Switzerland, Canton Solothurn). The non-pharma range of the joint venture will be distributed by Shop Apotheke Europe from the distribution centre of the company’s headquarters in Sevenum (Netherlands).

The transaction comprising the establishment of the joint venture and the capital increase by Shop Apotheke Europe will be executed after the approval of the competition authorities, which is expected in the first half of 2023.

As compensation for the sale of 51% of the company Mediservice Ltd. – net of and after the purchase of the shop-apotheke.ch business by Mediservice Ltd. – Galenica will receive 1.2 million shares of Shop Apotheke Europe, around 6% of the shares outstanding post-transaction. This represents a value of EUR 86 million at the VWAP (volume weighted average price) of the 20 trading days preceding signing of EUR 72 per share. In addition, Galenica will acquire 0.4 million more shares through a cash payment of EUR 29 million to Shop Apotheke Europe. Following the capital increase, Galenica will have a shareholding of 8% in Shop Apotheke Europe.

After implementation of the joint venture, Galenica will deconsolidate Mediservice Ltd. and include the new joint venture at equity in the consolidated financial statements. Galenica will therefore adjust the comparative period 2022 accordingly (restatement). The consolidated net sales for 2022 will be reduced by 11.1% to CHF 3,568.4 million, and the adjusted¹⁾ EBIT by 5.1% to CHF 190.6 million.

Assuming a start of the joint venture at the beginning of June 2023, Galenica expects the following development for the financial year 2023 based on the adjusted 2022 figures (restatement): a growth in consolidated net sales between +3% and +6% and in adjusted¹⁾ EBIT between +4% to +7%.
Based on the unadjusted prior year figures 2022 (without restatement), despite an expected decline in revenue of -9% to -6%, this guidance would still imply an expected adjusted¹⁾ EBIT at about the pri-or year's level. Previously, Galenica had assumed an increase in revenue and adjusted¹⁾ EBIT between +3% and +6%. The outlook for the 2023 dividend remains unchanged at least at the level of the previous year.

^{1 Excluding the effects of IAS 19 and IFRS 16.}