Günther Jauch is without doubt one of the best-known faces on German-language television. The trained journalist has hosted the quiz show "Wer wird Millionär?" for a quarter of a century. Jauch's celebrity status and positive image make him a sought-after advertising figure. For more than two years, Shop Apotheke has relied on the charisma of the now 68-year-old. In short clips, he advertises the online pharmacy's app, including the option to redeem electronic prescriptions. The e-prescription is seen as the great hope of Shop Apotheke and Redcare Pharmacy - the e-commerce service provider operating in seven European countries. With a capitalization of just under EUR 3 billion, Redcare is one of the 50 MDAX members. In terms of performance, the share was at the top of the German Mid Cap Barometer in 2023. Redcare's market capitalization expanded by around 200%.
A title defense is unlikely. However, Redcare is among the top 20 in the MDAX to date with a share price increase of a good tenth in 2024. After the mandatory introduction of e-prescriptions in Germany at the beginning of this year, the share initially embarked on a consolidation course. In operational terms, the digitalization of healthcare is paying off in full. Redcare Pharmacy reported record-high total sales of EUR 1.7 billion for the first nine months of 2024 - 34% more than in the same period of the previous year. The consolidation of Swiss Mediservice helped here. Redcare launched this joint venture with healthcare provider Galenica in 2023. Another driver is the German market. Here, Redcare and Shop Apotheke increased sales of prescription drugs (Rx) by more than 80% in the third quarter of 2024. In October, revenue in this area even increased by 130%.
"We are seeing great popularity for electronic prescriptions in Germany - among both new and existing customers," said CEO Olaf Heinrich. 90% of digital prescriptions are now filled via the app advertised by Günter Jauch. "We stepped up our marketing activities for Rx in Germany over the course of the year and decided to intensify them again in the fourth quarter," explained CFO Jasper Eenhorst. Consequently, he adjusted the forecast for the year as a whole. Among other things, the CFO now expects an operating margin (adjusted EBITDA) of between 1.2% and 2.2% for 2024. After nine months, the key figure was 2.3%. Redcare posted an EBITDA margin of 3% for 2023 as a whole. Profitability is expected to increase significantly in the medium to long term: Management is forecasting a margin of more than 8%.
Back to the Redcare share: it has shown relatively high volatility in recent months. The expected price fluctuation range or the range priced into options has a direct impact on the conditions of the new soft callable barrier reverse convertible. Leonteq has launched two variants of this popular structure. In the product currency CHF, the BRC on Redcare Pharmacy offers a guaranteed coupon of 10% p.a.. In the EUR-denominated counterpart, the distribution is 200 basis points p.a. higher. The barriers are uniformly at 55% of the initial level. As long as the underlying does not fall to or below this level, investors receive the nominal amount back in full at maturity. The positive influence of volatility on the BRC conditions has a downside: the price swings are accompanied by a corresponding risk of the barrier being breached. If Redcare were to break through the cushion outlined above, the partial protection would be a thing of the past.
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