Apotea intends to list its shares on Nasdaq Stockholm

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Apotea AB (publ) [1] (“Apotea” or the “Company”), Sweden’s largest online pharmacy, announces its intention to launch an initial public offering of the Company’s ordinary shares on Nasdaq Stockholm (the “Listing”). In connection with the Listing, a diversification of ownership is expected through an offering of existing shares (the “Offering”).

Apotea is Sweden’s largest online pharmacy.[2] The Company facilitates everyday life for its three million active customers by offering the widest product assortment[3] on the market fast, cheap and with free shipping. The Pharmacy Market is large and has a non-cyclical growth supported by several long-term structural trends. Pharmacy products are well-suited for online sales, yet the e-commerce penetration is low compared to other retail categories. Apotea has been self-funded since its launch in 2012 and has grown to a net revenue of SEK 6.3 billion with an adjusted EBIT margin[4] of 4.1 per cent during the twelve-month period ended 30 September 2024.

Apotea’s Board of Directors and executive management, supported by the principal owner Laulima AB (“Laulima”), have made the assessment that the Listing and the Offering are a natural next step in Apotea’s journey towards becoming the largest pharmacy in Sweden and hence, in the Nordics. The Listing is expected to strengthen Apotea’s brand and increase the general awareness of the Company. The Listing will also give Apotea access to the Swedish and international capital markets and expand the shareholder base. Nasdaq Stockholm’s listing committee has made the assessment that Apotea fulfils the listing requirements of Nasdaq Stockholm and will approve an application for admission to trading of the Company’s ordinary shares, provided that certain customary conditions are fulfilled. Depending on market conditions, the Listing and the Offering are expected to be completed during the fourth quarter 2024.

Pär Svärdson, CEO, member of the Board of Directors as well as co-founder of Apotea[5] and Laulima, comments:

“A listing of Apotea feels like a natural step on our journey to create the pharmacy of the future for our customers. An initial public offering will give us additional opportunities to continue to develop the company and realise our goal of becoming Sweden’s largest pharmacy. By constantly facilitating and simplifying for the customer, we continuously develop and define the next generation pharmacy. Since the start, our focus has been on our customer promise: fast, cheap and free shipping. We have had a profitable growth journey since the start and taken a clear position as Sweden’s largest online pharmacy. However, our journey has only just begun and I look forward to continue the journey together with our employees, customers and shareholders.”

The Offering in brief

Should the Company decide to proceed with the Listing, the Offering is expected to comprise the following:

• an offering to the general public in Sweden; and
• an offering to institutional investors in Sweden and abroad.

The offering to institutional investors will only be made (i) to certain institutional investors outside the United States, pursuant to Regulation S under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”); and (ii) in the United States, only to those reasonably believed to be Qualified Institutional Buyers (“QIBs”) in reliance on Rule 144A under the U.S. Securities Act.

The Offering is expected to consist of existing shares offered by existing shareholders, among others, Laulima, Alecta Tjänstepension Ömsesidigt, Neudi Kapital AB and Creades AB (publ). The Company does not intend to raise any funds, and will therefore not receive any proceeds, in connection with the Offering. Laulima intends to retain a significant part of its shareholding as well as remain as a committed and long-term shareholder after the completion of the Offering. In connection with the Listing, Pär Svärdson, Laulima, other members of the Board of Directors and executive management as well as other existing shareholders intend to enter into customary lock-up undertakings. The lock-up period will be 1,080 days for Pär Svärdson, 720 days for Laulima, 360 days for other members of the Board of Directors and executive management and 180–90 days[6] for other existing shareholders.

Full terms, conditions and instructions for the Offering will be included in the prospectus which is expected to be published by the Company in connection with the Listing and the Offering. The prospectus will, if published, be available on the Company’s website www.ir.apotea.se. Avanza Bank AB (publ) is Retail Distributor in connection with the Offering.

About Apotea

Apotea is Sweden’s leading online pharmacy by market share with the goal of becoming the largest pharmacy in Sweden and hence also in the Nordics. With the widest assortment on the market, low prices and quick deliveries, the Company facilitates everyday life for its three million[7] active customers. In E-barometern’s 2023 customer survey, Apotea was ranked as customers’ favourite e-commerce store for the sixth consecutive year, with almost one in six e-commerce consumers citing Apotea as their favourite. Since 2022, the Company also operates in Norway through its Norwegian subsidiary Apotera.

The vision is to be the pharmacy of tomorrow by constantly facilitating and simplifying for the customer. The business concept is to be the pharmacy that delivers on the customer promise “fast, cheap and free shipping”. Apotea’s business model is supported by an entrepreneurial culture, dedication to sustainability and constant pursuit of increased operational excellence. Through a high level of automation, clear cost focus and a well-invested infrastructure, Apotea achieves a high efficiency which has enabled a profitable growth. The Company’s IT platform, which is based on proprietary software for, for example, logistics and the handling of Rx products, as well as fulfilment centers with a high level of automation, enable both economies of scale and capital-efficient operations. Apotea had approximately 800 employees as of 30 September 2024, most of whom work at Apotea’s fulfilment centre in Morgongåva in the municipality of Heby.

Strengths and competitive advantages

Non-cyclical and structurally growing pharmacy market shifting to e-commerce

Apotea operates in the large, regulated and non-cyclical Pharmacy Market which has high barriers to entry in terms of regulations and economies of scale. The pharmacy channel primarily consists of Rx products, over-the-counter products and traded goods. Taking into account also related product categories sold outside the traditional pharmacy channel, the total addressable market amounts to SEK 110 billion in Sweden and SEK 66 billion in Norway.[8] Pharmacy products are well-suited for online sales, inter alia, since such products are in demand all year around, are rarely returned and have a high value in relation to their size/weight. Since the start, Apotea has pursued to develop the definition of a pharmacy assortment and continuously widened the product offering to suit its customers. Apotea’s assortment includes both external brands as well as own products and covers pharmaceuticals, beauty and health for humans and animals.

Market leader in the online pharmacy market with a category-winning customer proposition

Apotea is the largest Swedish online pharmacy with a market share online of 43 per cent as of 31 December 2023[9], corresponding to 9 per cent of the total pharmacy market.[10] Apotea’s success can largely be attributable to the Company’s strong customer proposition; fast, cheap and free shipping. This has resulted in a loyal and growing customer base, with 96 per cent of the Company’s orders in Sweden in 2023 attributable to repeat customers.[11] According to the Company, repeat customers tend to make more frequent purchases over time with increasing average order values, making the existing customer base contribute to growth over time.

Consumer favourite among e-commerce players in Sweden with a loyal and growing customer base

Apotea’s ambitious customer promise has resulted in a wide recognition among organisations and customers. According to E-barometern’s survey of Swedish consumers’ favourite e-commerce players in 2023, Apotea is in the first place for the sixth consecutive year. The Company has been awarded, inter alia, the Strongest Pharmacy Brand in Sweden 2015–2017, the Strongest digital Pharmacy Brand in Sweden between 2018–2024 by the Swedish Brand Awards and the leading e-commerce store across all retail categories by Prisjakt 2014–2021 and 2023. The Company has received recognition for its high customer satisfaction due to its strong customer proposition, which has resulted in a loyal and growing customer base. This is reflected by Apotea’s development of annual sales cohorts[12].

Well-invested platform with high level of automation and proprietary systems for scalable growth

Apotea operates in an intricate regulatory environment with pharmacy license requirements and regulatory compliance from authorities. The complexity on the Pharmacy Market requires customisation and scalability to create operational efficiency, which Apotea enables by a central fulfilment centre with high level of automation and its well-invested IT platform. The Company’s fulfilment centre in Morgongåva has, with its high level of automation, a capacity of approximately 100,000 orders daily. In addition, a second fulfilment centre is being built in Varberg and is expected to be operational in 2025. Apotea expects to increase the total daily order capacity to approximately 150,000 once the fulfilment centre in Varberg is operational.[13] Moreover, Apotea is continuously implementing initiatives to increase efficiency and reduce costs, including packaging robots and its proprietary system for Rx products.

Sustainability and social commitment are embedded in Apotea’s operations

Apotea works actively with sustainability by various initiatives that contribute to, for example, improved operating efficiency, team culture and a strengthened brand image. Apotea supports a number of charity organisations, and has since 2012 raised approximately SEK 130 million in donations to World Wildlife Fund WWF, SOS Barnbyar and medical supplies to Ukraine, among others. Other examples of initiatives implemented by the Company include the installation of a solar power system on the roof of its fulfilment centre in Morgongåva, covering most of the facility’s energy consumption, a collaboration with truck provider to electrify heavy transport, validated climate goals by Science Based Targets and the development of a new sector standard for freight packaging. The sustainability initiatives have contributed to the development of the Company’s sustainability profile and the Company has been recognised as the most sustainable e-commerce in Sweden by Sustainable Brand Index 2020 and 2021.

Self-funded profitable growth

During the year, Apotea has experienced continued solid profitable growth and strengthened its market position in Sweden.[14] During the nine-month period ended 30 September 2024, the net revenue increased with 21.6 per cent and the adjusted EBIT margin increased to 4.6 per cent compared to 2.0 per cent for the corresponding period in 2023. Essential to the growth has been the Company’s ability to deliver on its ambitious customer promise of quick deliveries, low prices and a high availability of the pharmacy market’s widest range of products as well as strong growth in sales of Rx products.

Apotea has since 2012 financed its growth mainly through strong operating cash flow driven by underlying profitability combined with a high inventory turnover rate and low working capital tied-up. Since inception, Apotea has financed significant investments related to fulfilment automation with internally generated funds and maintained a low indebtedness. Since 2021, the Company has invested approximately SEK 400 million in tangible assets and had as of 30 September 2024 a net debt to EBITDA ratio excluding leases of 0.0x.[15]

Experienced founding team and group management with proven track record

Apotea’s group management and founders consist of individuals with many years of experience in e-commerce, technology and traditional retail. Apotea was founded in 2012 by Pär Svärdson, former founder of Adlibris, as well as five other colleagues from Adlibris. Under Pär Svärdson’s leadership, Apotea has since its launch in 2012 grown to a business with a revenue of over SEK 6 billion with over 4 per cent adjusted EBIT margin in the last twelve months as of September 2024.

Selected financial information

The table below shows performance measures for Apotea for the financial years 2021–2023 as well as for the nine-month period ended 30 September 2023 and 2024, respectively.[16]

Financial targets and dividend policy[19]

In August 2024, the Board of Directors adopted the following financial targets and dividend policy:

• Net revenue growth: Apotea targets to double the net revenue within 4–5 years.

• Profitability: The Company’s short to medium-term target is an operating margin (EBIT margin) of 3–5 per cent.The Company’s long-term target is an operating margin (EBIT margin) of 7–8 per cent.  

• Dividend policy: The Company will primarily use positive cash flows for investments in profitable growth. Any surplus may be distributed to the Company’s shareholders subject to strategic and financial considerations.

Advisors

Carnegie Investment Bank AB (publ) and Skandinaviska Enskilda Banken AB (publ) are Joint Global Coordinators and Joint Bookrunners. ABG Sundal Collier AB is Joint Bookrunner. Advokatfirman Vinge KB and Milbank LLP are acting as legal advisors to the Company as to Swedish and U.S. law, respectively. White & Case is acting as legal advisor to the Joint Global Coordinators and Joint Bookrunners. Annika Sigfrid is an independent advisor to the Company’s Board of Directors and shareholders.

For further information, please contact:

Ingrid Christensson, Investor Relations

Telephone: +46-729 37 95 95

E-mail:  ingrid.christensson@apotea.se

IMPORTANT INFORMATION

This announcement is not, and does not form part of, an offer to sell or buy any securities.

This announcement is not being made, and may not be distributed in or sent to, the United States of America, Australia, the Hong Kong special administrative region of the people’s republic of China, Japan, South Africa or any other jurisdiction where such distribution would be unlawful or require registration or any other measures.

Any offering of the securities referred to in this announcement will be made by means of a prospectus (the “Prospectus”). This announcement is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (together with any related implementing and delegated regulations, the “Prospectus Regulation”). Investors should not invest in any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus.

In any EEA Member State other than Sweden, this announcement is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation.

This announcement and the information contained herein are not for distribution in or into the United States of America. This announcement does not constitute an offer to sell securities in the United States of America. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States of America without registration or an exemption from registration under the Securities Act and in accordance with applicable securities laws of the states of the United States of America. No public offering of securities is being made in the United States of America.

This announcement and this offering are only addressed to and are only directed at persons in any member state of the EEA, with the exception of Sweden, and the United Kingdom (each a “Relevant State”) who are “Qualified Investors” within the meaning of Article 2(e) of the Prospectus Regulation or the Prospectus Regulation made part of United Kingdom law by the European Union (Withdrawal) Act 2018, as applicable. The securities are only available to, and any invitation, offer or agreement to subscribe for, purchase or otherwise acquire such securities will be directed at, Qualified Investors in the Relevant State. Persons who are not Qualified Investors may not rely or refer to this announcement in any Relevant State.

This announcement does not constitute an offer of securities to the public in the United Kingdom. No prospectus has been or will be registered in the United Kingdom in respect of the securities. In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, qualified investors (as defined in the Prospectus Regulation as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018) and who are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant Persons”). This announcement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Persons distributing this announcement must satisfy themselves that it is lawful to do so.

This announcement may contain certain forward-looking statements. Such statements include statements regarding the Company’s business strategy, financial condition, profitability, market data and other statements that are not historical facts and include expressions such as “believes”, “considers”, “estimates”, “expects”, “anticipates”, “assumes”, “predicts”, “intends”, “may”, “continues”, “should”, “aims”, “forecasts”, “guides” or similar expressions. The forward-looking statements in this announcement are based on various estimates and assumptions, many of which are based on additional assumptions. Although the Company believes that these assumptions were reasonable when made, such forward-looking statements are subject to known and unknown risks, uncertainties and other important factors that are difficult or impossible to predict and are beyond the Company's control. Such risks, uncertainties and material factors could cause actual results to differ materially from those expressed or implied in this announcement by the forward-looking statements. The information, beliefs and forward-looking statements contained in this announcement speak only as of the date of this announcement and are subject to change without notice.

Each of Apotea and the selling shareholders and each of Carnegie Investment Bank AB (publ), Skandinaviska Enskilda Banken AB (publ) and ABG Sundal Collier AB (together the “Managers”) and their respective affiliates as defined under Rule 501(b) of Regulation D of the Securities Act (“affiliates”), expressly disclaims any obligation or undertaking to update, review or revise any forward looking statements contained in this announcement whether as a result of new information, future developments or otherwise, and the distribution of this announcement shall not be deemed to be any form of commitment on the part of Apotea or any of the selling shareholders to proceed with the Offering or any transaction or arrangement referred to herein.

The information in this announcement is subject to change. Before investing in any securities in the Offering, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus if published. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. This announcement shall not form the basis of or constitute any offer or invitation to sell or issue, or any solicitation of any offer to purchase any securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor.

Persons considering making investments should consult an authorised person specialising in advising on such investments. This announcement does not form part of or constitute a recommendation concerning any offer. The value of securities can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of a possible offer for the person concerned.

None of the selling shareholders, the Managers or any of their respective affiliates or any of their or their affiliates’ directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to Apotea, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Accordingly, each of the selling shareholders, the Managers, and any of their respective affiliates and any of their or their affiliates’ directors, officers, employees, advisers or agents expressly disclaims, to the fullest extent possible, any and all liability whatsoever for any loss howsoever arising from, or in reliance upon, the whole or any part of the contents of this announcement, whether in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

Each of the Managers is acting exclusively for Apotea and no one else in connection with the proposed Offering. They will not regard any other person as their respective clients in relation to the proposed Offering and will not be responsible to anyone other than Apotea for providing the protections afforded to their respective clients, nor for providing advice in relation to the proposed Offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the Offering, the Managers and any of their respective affiliates, may take up a portion of the shares as a principal position and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such shares and other securities of Apotea or related investments in connection with the Offering or otherwise. Accordingly, references in the Prospectus, once published, to the shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by the Managers and any of their respective affiliates acting in such capacity. In addition, the Managers and any of their respective affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which they may from time to time acquire, hold or dispose of shares. None of the Managers nor any of their respective affiliates intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Information to distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID 2”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID 2; and (c) local implementing measures (together, the “MiFID 2 Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the shares have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID 2; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID 2 (the “Target Market Assessment”). Notwithstanding the Target Market Assessment, distributors should note that: the price of the shares may decline and investors could lose all or part of their investment; the shares offer no guaranteed income and no capital protection; and an investment in the shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offering. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Managers will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID 2; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares. Each distributor is responsible for undertaking its own target market assessment in respect of the shares and determining appropriate distribution channels.