Redcare Pharmacy Strengthens Financial Foundation Through Debt Restructuring

Redcare Pharmacy has taken decisive steps to reinforce its balance sheet, successfully navigating a significant refinancing challenge. The company's strategic overhaul comes at a time when its core business operations are demonstrating considerable momentum.

The financial restructuring is supported by robust operational results. For the third quarter of 2025, Redcare Pharmacy reported revenue of 719 million euros, representing a year-on-year increase of 25.2%. The company's adjusted EBITDA margin reached 2.4%, signaling continued progress toward sustainable profitability.

A standout performer is the prescription medication (Rx) segment, where revenue surged by 42.3% to 272 million euros in Q3. The German market was particularly strong, with Rx sales climbing 82.1% to 126 million euros. Revenue from non-prescription products (Non-Rx) also grew, rising 16.7% to 448 million euros.

The company now serves over 13.5 million active customers across seven European markets. For the full year 2025, management reaffirmed its guidance, anticipating revenue growth exceeding 25% and an adjusted EBITDA margin between 2.0% and 2.5%.

Resolution of Legacy Debt Obligations

A central element of the company's strategy has been addressing its convertible bond maturing in 2028, originally issued in 2021 with a volume of 225 million euros. This instrument had created visible refinancing pressure for the coming years.

The company has now largely resolved this obligation through a tender offer and scheduled repayments:

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• Original bond volume (2021/2028): 225 million euros
• Repurchased via tender offer (April 2025): 157.9 million euros
• Scheduled repayment (January 2026): 64.5 million euros
• Remaining nominal amount: 2.6 million euros

Bondholders have exercised their repayment rights for 64.5 million euros, with payment scheduled for January 21, 2026. Following this, only 2.6 million euros of the old convertible bond will remain outstanding, effectively eliminating the short-term burden from this financing line.

New Financing and Enhanced Liquidity Position

Concurrently, Redcare Pharmacy placed a new convertible bond in 2025. The 300 million euro instrument matures in 2032, significantly pushing future repayment obligations further into the future and alleviating debt maturity pressures.

This liability management coincides with a substantially strengthened liquidity position. As of September 30, 2025, net liquidity stood at 265.6 million euros, a sharp increase from 177.6 million euros at the end of 2024. This represents growth of approximately 88 million euros, or nearly 50%, in just nine months.

This robust cash position provides ample coverage for the upcoming 64.5 million euro repayment in January 2026. The combination of high net liquidity and the longer-dated new bond meaningfully reduces short-term financing pressure.

Market Reaction and Forward Trajectory

Despite the improved financial footing and operational growth, the market's response has been muted. Shares closed at 65.60 euros on Friday, a level that remains approximately 50% below the price at the start of the year, even after a modest recovery from its 52-week low in recent weeks.

Looking ahead, Redcare Pharmacy has positioned itself with a notably more resilient capital structure. With the legacy convertible bond nearly settled, 300 million euros in new long-term financing secured until 2032, and net liquidity of 265.6 million euros, the company's focus remains firmly on growth. This expansion is now underpinned by a gradually improving profit profile and a significantly more relaxed financial position.