Zur Rose delays profitability break-even to 2024

By Anastasiia Kozlova and Tristan Chabba

(Reuters) – Swiss online drug retailer Zur Rose on Thursday said it will not reach break-even in adjusted core profit this year as it navigates regulatory requirements for rolling out online prescriptions in Germany.

It had said last year it expected its adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) to reach a “break-even point” in 2023.

It said it now expects a loss in adjusted EBITDA of between 20 million and 40 million Swiss francs ($22-44 million) in 2023.

“All in all, a disappointing outcome,” Baader Helvea analysts said, citing the break-even delay.

Zur Rose, which operates in Germany and the Netherlands, sold its Swiss business to Migros subsidiary Medbase in February to focus on its German business.

However, delays in Germany’s e-prescription roll-out have clouded the growth outlook for online pharmacies such as Zur Rose and Frankfurt-listed peer Shop Apotheke, and exposed their stocks to volatility.

Zur Rose said it expected e-prescriptions to be introduced as the mandatory standard by Jan. 1, 2024, citing the German Federal Ministry of Health.

The company also reported an adjusted core loss for 2022 of 69.7 million francs, beating a company-compiled consensus of 72 million.

It had a target of 70 million to 75 million francs.

The company has decided to change its name to DocMorris AG which it will use for both for the core B2C business and the Group.

The company’s shares were down 4.3% at 0824 GMT. In 2022 the stock lost 70% of its value due to delays in the introduction of e-prescriptions in Germany.

($1 = 0.9159 Swiss francs)

(Reporting by Anastasiia Kozlova Tristan Chabba in Gdansk; editing by Nivedita Bhattacharjee and Jason Neely)