PHARMASIMPLE: PHARMASIMPLE: DETAILS ON THE GROUP’S RESTRUCTURING AND STRATEGY – 2023-02-09 at 18:00

DETAILS ON GROUP RESTRUCTURING AND STRATEGY

Houdeng-Goegnies (Belgium), February 9, 2023, 6:00 p.m. – Following the latest press releases published on January 3 and 27, Pharmasimple (ISIN code: BE0974302342. Ticker: ALPHS) wishes to provide details on the progress of its restructuring and its strategy.

The necessary plan for the transformation of the group, carried out at the same time as the acquisition of pharmacies, led to streamlining efforts that were highly cash-intensive. In order to clear its financial situation as quickly as possible and preserve the company’s cash flow, Pharmasimple has decided to review its short-term development strategy and postpone its acquisition plan.

The Group’s financial situation, and in particular its debt situation, are summarized as follows:

As of December 31, 2022, Pharmasimple’s net debt amounted to €0.8 million, to which is added €2.8 million in trade payables. These figures reflect a sharp decrease compared to the situation at the end of December 2021. At that date, net debt stood at €8.6 million and supplier outstandings at €3.6 million.

The company’s debt is impacted in 2022 by two major non-recurring items: on the one hand, significant exceptional charges related to the various legal actions launched by the company’s minority shareholders (total cost of €0.5 million of which €0.2 million has already been paid) and on the other hand, high restructuring costs linked to the transition of the company’s economic model and the cessation of internet activity, including costs linked to layoffs in particular (total cost of €0.6 million).

Excluding these non-recurring items, the company’s overall debt is improved compared to the situation as of December 31, 2021.

The transition from the Group’s historical online sales model to a holding company indirectly owning pharmacies through its subsidiaries naturally led to a change in the nature of Pharmasimple’s debts. The company’s debt structure, which was initially mainly made up of debts to suppliers (in order to keep the warehouses sufficiently stocked to meet orders), will now mainly consist of vendor loans entered into to acquire the various physical pharmacies. Furthermore, the evolution of the economic model has also made it possible to drastically reduce the Group’s salary costs. To date, the workforce stands at 11 people against around fifty before the restructuring.

While a majority of Pharmasimple’s current debt still comes from its historical online sales activity (€1.3 million), Pharmasimple has seen a significant improvement in its financial situation, which should continue in 2023.

These streamlining efforts have also led the Group to recently postpone the acquisition of two new pharmacies.

The reorganization of the workforce, the sale of non-perennial activities and the settlement of liabilities are the priorities of the Group, which intends to relaunch its pharmacy acquisition program and sustain its new development model.

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About Pharmasimple

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About Pharmasimple: Pharmasimple is a distribution group specializing in the sale of pharmaceutical and parapharmaceutical products. With a network of around ten pharmacies in Belgium, the company aims to become one of the leaders in its sector in this country through an ambitious program of external growth. In 2021, Pharmasimple achieved sales of €30.0 million. Pharmasimple shares are listed on the Euronext Growth market. ISIN code: BE0974302342. Mnemonic: ALPHS.

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