Redcare Pharmacy's 2025 financial results revealed a stark contrast between prescription and over-the-counter performance. While the company posted strong revenue growth of 24.1% to €2.9 billion, driven by prescription sales surpassing €1 billion for the first time, its core OTC business showed alarming signs of weakness.

Non-prescription sales growth decelerated sharply to 9.3% in Q4 from 19.7% in Q1, with management citing lower marketing spend and a soft market environment. The company's guidance for 2026 projects further slowdown to 8%-10% non-Rx growth. Despite these challenges, adjusted EBITDA rose 72% to €57.4 million, though fourth-quarter margins slipped to 1.6%.

Redcare's DACH segment generated €2.40 billion, representing 82% of group revenue with a 2.7% adjusted EBITDA margin. The international segment improved its adjusted EBITDA loss to €6.6 million from €16.6 million. CFO Hendrik Krampe outlined ambitious medium-term margin targets above 5% and long-term targets above 8%, citing automation and marketplace growth as key drivers.

The company's heavy investment phase, with €118.6 million in capital expenditure concentrated on automation and logistics, is expected to normalize to around 2% of revenue thereafter. Redcare's guidance for 2026 includes revenue growth of 13%-15% and an adjusted EBITDA margin of at least 2.5%, though the sustainability of its OTC business remains a concern for investors.