PRESS RELEASE
FARMACOSMO: THE BOARD OF DIRECTORS APPROVES THE CONSOLIDATED INTERIM
FINANCIAL REPORT AS OF 30TH JUNE 2024
SALES REVENUES REACHED € 32.5 M
POSITIVE EBITDA STANDING AT € 0.3 M
ADJUSTED EBIDTDA FOR START-UP ACTIVITIES POSITIVE AT € 0.6 M
-
CONSIDERABLE GROWTH NOTED IN THE PET INDUSTRY UNDER THE BAU
COSMESI BRAND
-
CONSIDERABLE GROWTH NOTED IN THE PET INDUSTRY UNDER THE BAU
- FARMACIA DE LEO SRL SWITCHES GROUND FROM A NEGATIVE EBITDA OF €14K
TO A POSITIVE €133K - THE PROFUMERIAWEB.COM PORTAL REBOOT HAS BEEN SUCCESSFULLY
EXECUTED
- THE PROFUMERIAWEB.COM PORTAL REBOOT HAS BEEN SUCCESSFULLY
THE START-UP CONTACTU EXCEEDS 11,000 HOURS OF THERAPIES
Key consolidated results:
- Sales Revenue: € 32.5 million (-11.6% YoY);
- Value of Production: € 33.1 million (-11.5% YoY);
- EBITDA: Euro 0.3 million (Euro 30,000 in 2023);
- EBITDA adjusted for start-up activities (ContactU): € 0.6 million;
- Group result for the year: Euro -1.1 million, an improvement from Euro -1.7 million in the first half of 20231;
- NFP (net debt): € 1.7 million (€ 1.2 million at the end of 2023).
Naples, 27 September 2024
The Board of Directors of Farmacosmo S.p.A. ('Company', 'Farmacosmo'), a company operating in the Health, Pharma & Beauty, Pet and Digital Health sectors, listed on the Euronext Growth Milan market of Borsa Italiana, met today and approved the Consolidated Interim Financial Report as at June 30 2024 which was voluntarily subjected to a limited audit.
Fabio de Concilio, CEO and Chairman of Farmacosmo, commented: 'The first six months of 2024 show a strong progression
of the Group's margins to over EUR 330,000 (over EUR 550,000, segregating start-up activities) compared to a substantially nil result in the first half of last year. This important achievement is mainly attributable to four factors:
- Reduction of the B2B channel on the core-business and positioning on the retail channel, which now weighs more than 70% of the group's revenue, confirming, given the growth of the channel's management KPIs2, once again the high level of customer base loyalty thanks to the high quality of the customer engagement actions implemented by
- The result for the first half of 2024 is affected by amortisation related to acquisitions and divestments between the end of 2022 and the beginning of 2024 amounting to approximately EUR 0.5 million.
- For more details see the Press Release of 26 July 2024 on the consolidated operating data for the first half of 2024.
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management;
- Re-startof "ProfumeriaWeb" (first M&A deal completed in Q4 2022) with increased revenues and margins and completing the integration of Pharmasi thanks to numerous cost synergies and the work done by the joint marketing and communications team;
- Exponential growth of the proprietary brand "Bau Cosmesi" (+472% revenue growth) driven by the launch of new products (supplements and food) and continued investment in brand awareness;
- Full internal management of logistics, accounting and IT management for: farmacosmo.it, baucosmesi.it, profumeriaweb.com and farmawow.it.
In our future strategy (starting from the first quarter of 2025), there will be a strong shift in revenues from B2B in favour of the "Digital Health" business. Generating revenues without sufficient margins is a losing strategy for the size of small caps. The Group is now ready to focus on revenue growth having consolidated all the integrations and found the right balance in the profitability of the individual legal entities.
The cost synergies implemented in the second half of 2023, including the centralisation of marketing, logistics and operations functions transferred to the parent company, are now starting to fully manifest their value in terms of cost efficiency. As of August 2, Farmacosmo Logistics S.r.l..3, a NewCo wholly owned subsidiary of Farmacosmo, became operative. It has been entrusted with all of the Group's logistics activities, which will enable the achievement of significant structural and economic benefits in terms of savings, estimated at full operation to be over EUR 140,000 per year.
ContactU, our telepsychology platform, continues its daily growth with robust KPIs and numerous initiatives launched and in progress. The ContactU platform has a conversion rate of more than 50% from questionnaire to first interview and more than 30% from questionnaire to recurring patient; it exceeded 11,000 hours of therapy delivered in the first half of the year and continues to grow strongly. These robust KPIs indicate good strategies and strategic positioning. The usual seasonality of the fourth quarter, incremental in volume, and the results of the third quarter make us look positively towards the second half of the year".
Key Consolidated Financial Results as at 30 June 2024
3 For any further details, please refer to the Press Release of 15 July 2024 and 1 August 2024
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Consolidated Sales Revenues amounts to approximately 32.5 million, a decrease of 11.6% compared to approximately 36.7 million as of June 30 2023 due to the intended and declared decrease in the B2B channel.
It should also be noted that on February 15, the Company announced that it had divested its stakes in the pharmacies in Turin (GPharma 1) and Verbania (GPharma2), whose revenues in the first half of 2023 amounted to approximately EUR 1.2 million 4.
Below is a breakdown of 'Sales revenues' by business channel in thousands of Euro.
Sales Revenue | 1H2024 | 1H2023 | Delta % |
Retail | 23.180 | 22.428 | 3,4% |
Farmacosmo.it | 17.734 | 18.260 | (2,6%) |
ProfumeriaWeb.com | 1.851 | 1.740 | 6,4% |
Pharmasi.it | 1.992 | 2.193 | (12,4%) |
Baucosmesi.it | 1.349 | 236 | 471,9% |
FarmaWoW.it | 283 | - | n.a. |
Farmacosmo B2B | 7.941 | 12.116 | (34,5%) |
Physical Pharmacies | 1.095 | 2.162 | (51,3%) |
Total excl. Start-up | 32.174 | 36.706 | (12,3%) |
ContactU | 287 | 19 | >1.000% |
Total | 32.461 | 36.725 | (11,6%) |
The strategy of diversifying revenues across several verticals in the wellness world proved to be successful, completely absorbing the decrease in the B2B channel also in terms of EBITDA.
Consolidated EBITDA for the first six months of 2024 was positive and amounted to Euro 334 thousand compared to Euro 30 thousand in the same period of the previous year. Separating the ContactU component, which is in a phase of growth and investments aimed at strengthening its market position, the group's consolidated EBITDA would stand at €553 thousand, up 345% year-on-year.
In detail, the first half of 2024 confirmed the growth of the retail channel, whose revenues amounted to approximately Euro 23.2 million, up 3.4% compared to the same period of the previous year. Growth is driven both by 'Bau Cosmesi', whose revenues amounted to over Euro 1.3 million (vs. Euro 0.2 million in the same period of the previous year) thanks to the introduction of new products, and by "ProfumeriaWeb" whose revenues amounted to over Euro 1.8 million, an increase of 6.4% year on year. Farmacosmo.it and Pharmasi continue to focus their activities on higher margins on sales, recording revenues of approximately Euro 17.8 million and Euro 1.9 million respectively, a decrease of 2.6% and 12.4% compared to the same period of the previous year. This strategic choice improved EBITDA by 20% and over 1,000% respectively.
The physical pharmacy channel, having divested the participation in the Piedmont region, consists of the pharmacy in Messina and the parapharmacy in Naples. The year-on-yearrevenue of the two pharmacies is stable at approximately EUR 1.1 million. Therefore, the difference compared to the same period of the previous year, amounting to Euro 1.1 million, is due to the exit from the perimeter of the pharmacies in Turin and Verbania.
Lastly, ContactU, the telepsychology start-up for patients and companies launched in the summer of 2023, exceeded 11,000 hours of therapies delivered, which is more than the number of therapies delivered in the whole of 2023, with a revenue of approximately EUR 287,000 compared to the revenue of EUR 194,000 in the whole of 2023. Numerous initiatives were launched in the first six months: start of the provision of training services for therapists, the first training sessions dedicated to the well-being of researchers from the Graduate Schools Earth, Planets, Universe and Biomedical
4 For any further details please refer to the Press Release of 15 February 2024.
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Engineering of the Université Paris Cité and the Centre national de la recherche scientifique (CNRS) in Paris, start of the provision of the first group therapy sessions within the platform.
Below is the detailed EBITDA by Legal Entity in thousands of Euro to clearly and comprehensively represent the development of the various subsidiaries.
EBITDA | 1H2024 | 1H2023 | Delta % |
Farmacosmo | 382 | 319 | 20% |
ProfumeriaWeb | (54) | (86) | 37% |
Farmacia De Leo | 133 | (14) | >1.000% |
BauCosmesi | 146 | 2 | >1.000% |
FarmaWoW | (54) | - | n.a. |
Innovation Pharma5 | - | (97) | n.a. |
Total excl. Start-up | 553 | 124 | 345% |
ContactU | (219) | (95) | (132%) |
Total | 334 | 30 | >1.000% |
Farmacosmo standalone showed an EBITDA of about Euro 382,000, up 20% despite the reduction in revenue in the B2B channel (-34.5%). The increase in EBITDA is mainly due to the positive impact of the higher marginality of the retail channel implemented in the second half of the previous year together with a careful cost policy.
Similarly, all the other retail channels improved markedly compared to the previous year, also highlighting the exponential growth of "BauCosmesi" with an EBITDA Margin for the half-year of 11%, the approach to positive profitability of "ProfumeriaWeb", the jump in profitability of Farmacia De Leo, which went from minus EUR 14,000 in the first half of 2023 to plus EUR 133,000 thanks to the valuable work done by the joint management team on the Pharmasi portal.
Finally, ContactU, the telepsychology startup for patients and companies launched in the summer of 2023, shows a negative EBITDA of around EUR 219,000 in the first half of 2024. It should be emphasised that ContactU is in a phase characterised by strong growth-oriented investments, therefore, the negative EBITDA reflects the initial structural costs, marketing investments and the still small size of the company.
The Group's Consolidated Result for the period amounted to Euro -1.1 million, an improvement compared to Euro -1.7 million in the first half of 2023, and was further impacted by the amortisation and depreciation related to the goodwill of the investments arising from the consolidation process.
The Consolidated Net Financial Position, cash negative by about EUR 1.7 million (EUR 1.2 million cash negative at the end of 2023) andis influenced by the trend in commercial working capital, the investments implemented for the launch of the ContactU telepsychology platform.
The Group's Consolidated Shareholders' Equity amounted to Euro 12.4 million (vs. Euro 12.9 million at the end of 2023), in addition to minority interests for a total amount of Euro 12.6 million, down from Euro 15.3 million at the end of 2023, mainly due to the exit from the consolidation scope of the subsidiaries divested at the beginning of 2024.
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5 Including not only the vehicle Innovation Pharma but also its subsidiaries GPharma 1 S.r.l. and GPharma 2 S.r.l.
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Significant events occurring during the period
- The exercise period for the "FARMACOSMO WARRANTS 2022-2025", which ran from January 1st, 2024 to January 31st, 2024 (initial and final terms included), ended on January 31st, 2024. During this period, no requests to exercise the warrants were received, and consequently, no newly issued shares of Farmacosmo S.p.A. were subscribed.
- On February 15th, 2024, it was announced the finalization of the closing of the sale of 67% of the company Innovation Pharma S.p.A. by Farmacosmo, for which a binding agreement was signed on February 7th, 2024. The sale was valued at approximately €5.82 million, alongside the simultaneous repurchase of 67% of Farmacia De Leo S.r.l. by Farmacosmo, valued at approximately €5.31 million. As a result, G&Ph Holding S.r.l. will own 100% of Innovation Pharma and its subsidiaries, GPharma1 S.r.l. (Farmacia Torino) and GPharma2 S.r.l. (Farmacia Verbania), while Farmacosmo S.p.A. will hold 67% of Farmacia De Leo. This transaction does not alter the execution of the business plan strategy, particularly regarding the creation of a network of pharmacies and parapharmacies in major Italian cities, as previously described in the Admission Document. The transaction is aimed at reorganizing and optimizing investments in the physical pharmacy segment.
- On March 25th, 2024, through a specific waiver letter aimed at enhancing capital consistency, , the Company waived certain trade and financial receivables owed by the Company to its subsidiary Vin.Ci. S.r.l. and Telepsicologia S.r.l., in the total amount of 163,008 euros and 182,000 euros, respectively.
Significant events after the end of the period
-
On July 15th, 2024, the Board of Directors of the Parent Company ("Company") approved an intercompany reorganization transaction involving the establishment of a new limited liability company fully owned by Farmacosmo, named "Farmacosmo Logistics S.r.l." ("NewCo"), and the subsequent contribution - by the Company and in favor of NewCo - of the "Logistics" business unit, relating to the logistics activities carried out by Farmacosmo (the "Logistics Branch").
The transaction is part of the broader transformation project of the Farmacosmo Group, which saw the weight of the retail channel increase from 44 % at the date of listing to 70 % at the end of 2023. It should be noted that as of today, Farmacosmo's centralized logistics supports the following Group portals: 'farmacosmo.it', 'profumeriaweb.com', 'baucosmesi.it' and 'farmawow.it'. The first three portals use the proprietary technology called 'delivery manager' (farmawow expected by the end of 2024). The strategic rationale for the transaction is to be found in the opportunity to create a deeply specialized logistics hub serving the Group, also considering the growth of the retail channel. Thus, it seems clear how all the expertise gained over the years can take shape in a single entity generating significant economies of scale, improving the quality of service and consequently making the cost structure more efficient.
The company has been incorporated and became operational in August 2nd, 2024.
Foreseeable development of management
The underlying macroeconomic environment has been characterized by moderate growth and a reduction in the inflationary phenomena experienced in previous years. However, uncertainties arising from geopolitical tensions persist.
The first six months of 2024 showed a further reduction in the weight of the B2B segment (down 34.5% year-on-year) as a result of the Company's strategic decision to focus on more profitable businesses. The B2B segment's revenue weight in total revenue, which was 56% at the time of listing, now stands at 24%. Similarly, the Group has continued to focus its efforts on the development of proprietary portals by investing heavily in their growth, particularly "BauCosmesi" and "ProfumeriaWeb". Numerous marketing and technological investments were made on the ContactU platform, the telepsychology start-up, which in the first six months delivered more than 11,000 hours of therapies, thus surpassing the number of therapies delivered in all of 2023 in the first six months of 2024, standing at a revenue of approximately 287 thousand euros.
The second half of 2024 will be characterized by the typical seasonality of the online commerce market, which sees the highest volumes in October, November, December. In addition, further revenue growth of the ContactU online telepsychology platform is expected through the signing of additional B2B trade agreements and to the increase of active patients.
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Attachments to the press release
- Consolidated Reclassified Income Statement as of June 30th, 2024
- Consolidated Reclassified Balance sheet as of June 30th, 2024
- Consolidated Net Financial Debt as of June 30th, 2024
- Consolidated Reclassified Cashflow statement as of June 30th, 2024
This press release is available on the www.farmacosmoinvestors.comwebsite, section "Investors/Press Releases" and on the authorized storage mechanism "eMarket Storage" (www.emarketstorage.com).
Documents relating to the consolidated half-yearly financial report as of June 30th, 2024, required by current regulations, will be made available to the public at the Company's registered office, on the website of Borsa Italiana S.p.A., as well as on the Company's website.
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THE SOCIETY
Farmacosmo is a company active in the Health, Pharma & Beauty sectors. The company's business model is based on the circular model of the l(ea)n strategy, and is divided into three main business areas: Logistics, Intelligence and Node.
Logistics: enables the management and fulfillment of up to 12,000 orders per day, with delivery times of up to 20 hours from carrier picking and just-in-time procurement ('zero warehouse' policy).
Intelligence: includes strategy definition, competitive positioning and customer journey activities, which enabled the company to intercept c. 188,000 customers in 2021. Recurring customers contributed 74% of the annual retail stream revenue. The average cart value of active customers in the retail stream amounted to €92 (€109 related to recurring customers).
Node: R&D activities, process innovation and IT infrastructure of the company.
The Farmacosmo ecosystem aims to pursue standards of excellence in every part of its value chain, inspired by compliance with
of ESG principles at all stages of the logistics process (from the packaging used for online orders, to carbon compensation initiatives) and in the empowerment of its employees, the company's strategic asset.
Farmacosmo's commitment to ESG is also corroborated by the publication of its Sustainability Report 2022.
IDENTIFICATION CODES
Ordinary Shares: ISIN IT0005487670 (Ticker COSMO)
Warrant Farmacosmo 2022-2025: ISIN IT0005487415 (Ticker WCOSMO)
FOR FURTHER INFORMATION:
INVESTOR RELATIONS MANAGER EURONEXT GROWTH ADVISOR INVESTOR & MEDIA RELATIONS ADVISOR
Farmacosmo | Illimity Bank | IR Top Consulting |
Via Crispi, 51 - 80121 Napoli | Via Soperga, 9 - 20124 Milano | Via Bigli, 19 - 20121 Milano |
Tel. +39 02 50042143 | Tel. +39 02 82849699 | Tel. +39 02 45473883 |
Paolo Cimminoir@farmacosmo.itfarmacosmo@illimity.com | Pietro Autelitano ir@irtop.com | |
Domenico Gentileufficiostampa@irtop.com |
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CONSOLIDATED BALANCE SHEET
(million euros) | June 30, 2024 | December 31, 2023 | Change % |
Intangible fixed assets | 13.097 | 15.673 | (16%) |
Tangible fixed assets | 313 | 494 | (37%) |
Financial fixed assets | 108 | 123 | (12%) |
Net Fixed Assets | 13.519 | 16.290 | (17%) |
Inventories | 8.390 | 7.332 | 14% |
Trade receivables | 4.475 | 4.955 | (10%) |
Trade Payables | (11.840) | (11.913) | (1%) |
Trade working capital | 1.025 | 374 | 174% |
Other current assets | 356 | 65 | 450% |
Other current liabilities | (1.017) | (918) | 11% |
Tax receivables and payables | 1.415 | 1.754 | (19%) |
Accrued liabilities and deferred income | (232) | (278) | (16%) |
Net working capital | 1.548 | 997 | 55% |
Reserves for contingencies and other charges | (26) | (26) | 0% |
Employee termination indemnities | (715) | (654) | 9% |
Net invested capital (uses) | 14.325 | 16.607 | (14%) |
Due to banks | 6.571 | 6.699 | (2%) |
Other financial payables | 157 | 11 | >1.000% |
Financial receivables | (380) | (411) | (7%) |
Liquid funds | (4.653) | (5.065) | (8%) |
Net financial position | 1.694 | 1.234 | 37% |
Share capital | 3.481 | 3.481 | 0% |
Reserves | 10.004 | 12.666 | (21%) |
IX - Profit (loss) for the year | (1.081) | (3.232) | (67%) |
Shareholders' equity | 12.403 | 12.915 | (4%) |
Minority shareholders' equity | 227 | 2.458 | (91%) |
Total Shareholders' equity | 12.631 | 15.373 | (18%) |
Total sources | 14.325 | 16.607 | (14%) |
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CONSOLIDATED INCOME STATEMENT
(million euros) | June 30, 2024 | June 30, 2023 | Change % |
Revenues from sales and services | 32.461 | 36.725 | (12%) |
Increases in internally constructed fixed assets | 426 | 484 | (12%) |
Other revenues and proceeds | 234 | 232 | 1% |
Value of production | 33.121 | 37.441 | (12%) |
Costs for raw and ancillary materials, consumables and goods | (26.247) | (31.487) | (17%) |
Costs for services | (5.685) | (5.250) | 8% |
Costs for use of third party assets | (183) | (221) | (17%) |
Costs for personnel | (1.797) | (2.032) | (12%) |
Change in inventories of raw materials | 1.304 | 1.690 | (23%) |
Other operating expenses | (179) | (111) | 61% |
EBITDA | 334 | 30 | >1.000% |
Depreciation, amortisation and write downs | (1.271) | (1.560) | (19%) |
EBIT | (937) | (1.531) | (39%) |
Financial result | (235) | (419) | (44%) |
EBT | (1.172) | (1.949) | (40%) |
Taxes | (44) | (151) | (71%) |
Result for the year | (1.216) | (2.100) | (42%) |
Third-part result for the year | (135) | (370) | (64%) |
Goup result for the year | (1.081) | (1.730) | (38%) |
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CONSOLIDATED NET FINANCIAL DEBT
(million euros) | June 30, 2024 | December 31, 2023 | Change % |
A. Liquid funds | 4.653 | 2.831 | 64% |
B. Cash equivalents to liquid funds | - | - | 0% |
C. Other current financial assets | 380 | 294 | 29% |
D. Cash (A) + (B) + (C) | 5.034 | 3.125 | 61% |
E. Current financial debt | (6.435) | (3.143) | 105% |
F. Current part of non-current debt | - | - | 0% |
G. Current financial debt (E) + (F) | (6.435) | (3.143) | 105% |
H. Net current financial debt (G - D) | (1.402) | (18) | >1.000% |
I. Non-current financial debt | (293) | (1.301) | (78%) |
J. Debt instruments | - | - | 0% |
K. Trade and other non-current payables | - | - | 0% |
L. Non-current financial debt | (293) | (1.301) | (78%) |
M. Total financial debt (H) + (L) | (1.694) | (1.319) | 28% |
CONSOLIDATED CASHFLOW STATEMENT, INDIRECT METHOD
(million euros) | June 30, 2024 | June 30, 2023 |
1. Profit (loss) before tax, interest, dividends and gain/loss on disposal | (609) | (1.532) |
Total adjustments for non-cash items that did not have a balancing entry | 1.372 | 1.581 |
in the N.C.C. | ||
2. Final flow before changes in the N.C.C. | 763 | 49 |
3. Final flow after changes in the N.C.C. | (714) | (5.297) |
Final flow of income management (A) | (1.281) | (5.909) |
Final flow of investment activity (B) | 1.501 | (684) |
Cash flow from financing activities (C) | (632) | 2.574 |
Increase (decrease) in cash and cash equivalents (A+B+C) | (412) | (4.020) |
Total cash and cash equivalents at the beginning of the year | 5.065 | 6.851 |
Total cash and cash equivalents at the end of the year | 4.653 | 2.831 |
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