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  • Aspen increases revenue from continuing operations by 12% to R37,8 billion
    on 01.09.2021

    Johannesburg - JSE Limited listed Aspen Pharmacare Holdings Limited (APN), a global multinational specialty pharmaceutical company, is pleased to report the following salient financial results for the year ended 30 June 2021: Revenue from continuing operations increased by 12% to R37,8 billion (June 2020: R33,7 billion*);Normalised EBITDA from continuing operations increased by 3% to R9,9 billion (June 2020: R9,6 billion*);Normalised headline earnings per share from continuing operations increased by 10% to 1 309,7 cents (June 2020: 1 194,8 cents*);Headline earnings per share from continuing operations increased by 21% to 1 204,3 cents (June 2020: 998,1 cents*);Earnings per share from continuing operations increased by 42% to 1 051,1 cents (June 2020: 740,5 cents*);Total Headline earnings per share decreased by 15% to 1 119,1 cents (June 2020: 1 322,1 cents);Total Earnings per share increased by 3% to 1 052,9 cents (June 2020: 1 021,8 cents);Net Borrowings declined materially to R16,3 billion (from R35,2 billion at June 2020);The leverage ratio, for banking covenant measurement purposes, of 1.7x is significantly below the threshold of 3.5x;Strong operating cash flow conversion rate of 134% aided by a reduction in working capital for the second consecutive year; andResumption of dividends to shareholders of 262 cents per ordinary share (June 2020: no dividend declared or paid). *The prior year comparatives for continuing operations have been restated to include the discontinued European business within discontinued operations in compliance with IFRS 5. The discontinued European business comprises the European Thrombosis assets divested to Mylan until the date of disposal being 27 November 2020, the costs relating to its disposal, related Thrombosis product discontinuations and other product divestments. COMMENTARY GROUP HIGHLIGHTS (CONTINUING OPERATIONS) The commencement of production of COVID-19 vaccines at our Gqeberha manufacturing site in South Africa has been the stand-out achievement in a successful year for Aspen. Johnson & Johnson and Aspen are in discussions to evaluate the further expansion of capacity at the Gqeberha site to enable increased COVID-19 vaccine production, including a possible license for Africa. For the full twelve months, the Group has also continued providing reliable supply of its medicines and products globally despite the ongoing challenges imposed by COVID-19. Group revenue increased 12% to R37,8 billion, with Commercial Pharmaceuticals up 6% and Manufacturing advancing 36%. Normalised EBITDA was 3% higher at R9,9 billion, as a lower gross profit percentage and reduced other operating income were partially offset by well controlled operating expenses. Normalised headline earnings per share (“NHEPS”) increased 10% to R13,10, benefitting from reduced finance costs. Net borrowings declined materially to R16,3 billion as at 30 June 2021, from R35,2 billion in the prior year. The reduction in net borrowings was driven by the cash consideration from the completion of the divestment of the European Thrombosis business, strong operating cash flows and the benefit of a stronger ZAR relative to the EUR and AUD at year-end. The leverage ratio1[1], as at 30 June 2021, is 1,74 times, well below the 3,5 times banking covenant. The table below compares performance from continuing operations in the prior comparable period at reported exchange rates and then at constant exchange rates (“CER”). The difference between reported and CER revenue growth has narrowed since the first half results as a result of the ZAR strengthening during the second half of the current financial year against the majority of the other currencies in which Aspen trades. Continuing operationsReported FY 2021 R’millionRestated FY 2020 R’million^Change at reported rates %Change at CER# %Revenue37 77633 6591210Normalised EBITDA*9 9459 61231NHEPS** (cents)1309,71 194,8107 #CER removes the currency effect on performance. FY2020 reported results was recalculated at FY 2021 average exchange rates. This provides illustrative comparability with the current year’s reported performance. ^FY 2020 has been restated as a result of the discontinued operations *Normalised EBITDA represents operating profit before depreciation and amortisation adjusted for specific non-trading items as defined in the Group’s accounting policy ** NHEPS is HEPS adjusted for specific non-trading items, being transaction costs and other acquisition and disposal-related gains or losses, restructuring costs, settlement of product related litigation costs, net monetary adjustments and currency devaluations relating to hyperinflationary economies and significant once-off tax provision charges or credits arising from the resolution of prior year tax matters. DISCONTINUED OPERATIONS Discontinued operations for the year ended 30 June 2021 comprise the results of the European Thrombosis business to date of disposal (being 27 November 2020), the costs relating to its disposal, related Thrombosis product discontinuations, other product divestments and the residual costs related to prior period disposals. Discontinued operations in the prior period include the results of the operations classified as discontinued in the current period as well as those discontinued in the prior financial year. SEGMENTAL PERFORMANCE Commercial Pharmaceuticals Commercial Pharmaceuticals, comprising of Aspen’s Regional Brands and Sterile Focus Brands, grew revenue by 6% (+4% CER) to R27,9 billion. Gross profit increased 4% (+3% CER) to R15,6 billion, supported by a resilient performance from Regional Brands, partially diluted by an unfavourable mix in Sterile Focus Brands as well as higher manufacturing and supply chain costs associated with operating during the pandemic. Regional Brands Regional Brands revenue increased 3% (+2% CER) to R17,2 billion. This is a sound performance given the negative impact from the pricing adjustment to the European oncology products and the persistent unfavourable influence of COVID-19 on certain therapies within this portfolio. A strong performance in OTC products underpinned growth in the key territories of Africa Middle East (+2% CER) and Australasia (+6% CER). Sustained positive revenue gains in Latin America supported the growth in the Americas region (+9% CER). The gross profit percentage improved as cost savings outweighed downsides from the pricing reductions in the oncology portfolio. Sterile Focus Brands Revenue from Sterile Focus Brands increased 11% (+9% CER) to R10,7 billion. Demand remained volatile, following the COVID-19-wave trends with products used as interventions for COVID-19 patients picking up as infections in a country increased while products used in elective surgeries fell. Growth was driven by strong sales in China, Russia and Latin America. Gross profit percentages declined due to changes in product mix. Manufacturing Manufacturing revenue increased 36% (+29% CER). Excluding the supplies to the counterparties of recent transactions, Manufacturing revenue was up 12% (+7% CER). The low/no margin nature of the transaction-related finished dose form supply and the higher costs of production under COVID-19 weighed on the gross profit percentage. COVID-19 vaccine sales (circa R400 million) commenced at the end of the third quarter of the financial year. PROSPECTS The commencement of production of the COVID-19 vaccine at our manufacturing site in Gqeberha towards the end of the third quarter of the financial year ended 30 June 2021 was a landmark event in our endeavours to increase access to medicines, particularly for our home continent of Africa. Our strategy to invest in sterile manufacturing facilities has positioned us to play an increasing role in the provision of the COVID-19 vaccine with potential to make a meaningful contribution to addressing the inequality in access to medicines. Aspen is hopeful that the current discussions between Johnson & Johnson and Aspen, including a possible license for Africa, could make a meaningful contribution to improving equitable COVID-vaccine access for the continent. Our reshaped Commercial Pharmaceutical business has delivered solid organic revenue growth, which is anticipated to continue in the year ahead. We will continue to refine our product portfolios to ensure that Aspen’s offering remains relevant to dynamic market conditions. The Manufacturing business has made a number of important advances over the past year and is poised to play a material role in driving top and bottom line growth. Many new opportunities are under assessment. Gearing of the balance sheet has been substantially reduced and we now have significant capacity in terms of our capital allocation model for value adding investments when suitable opportunities are identified. The 2022 financial year promises to be an exciting one for Aspen. Assuming business as usual, CER revenue growth is expected in the higher single digits with an improved EBITDA margin percentage and reduced finance costs allowing CER NHEPS to grow even more strongly. Exchange rate fluctuations may influence reported results. Any forecast information provided in the abovementioned paragraph has not been reviewed or reported on by the Group’s auditors. DIVIDEND TO SHAREHOLDERS Taking into account the earnings and cash flow performance for the year ended 30 June 2021, existing debt service commitments, future proposed investments and funding options, notice is hereby given that the Board has declared a gross dividend, which is paid from income reserves, of 262 cents per ordinary share to shareholders (or 209,6 cents net of a 20% dividend withholding tax, where this maximum rate of tax applies) recorded in the share register of the Company at the close of business on 23 September 2021 (2020: no dividend declared or paid).   [1] Calculated in terms of the relevant Facilities Agreement

  • Stephen Saad discusses the J&J vaccine release with eNCA’s Sally Burdett
    on 27.07.2021

    Aspen confirmed on 26 July 2021 that the first supplies to South Africa of the Johnson & Johnson COVID-19 vaccines, from the new API source located in Europe, were being released to Johnson & Johnson from its flagship Gqeberha-based manufacturing site. These vaccines will be further distributed throughout South Africa in line with the various distribution arrangements between Johnson & Johnson, the National Department of Health and other stakeholders. In addition, vaccines from these batches will be made available through the African Vaccine Acquisition Task Team/African Union platform. https://vimeo.com/579759755

  • Aspen confirms release of Covid-19 vaccines to Johnson & Johnson for supply to South Africa
    on 26.07.2021

    Durban, South Africa - Aspen, a global multinational specialty pharmaceutical company, is pleased to confirm that the first supplies to South Africa of the Johnson & Johnson COVID-19 vaccines, from the new API source located in Europe, will be released to Johnson & Johnson from its flagship Gqeberha-based manufacturing site later today. These vaccines will be further distributed throughout South Africa in line with the various distribution arrangements between Johnson & Johnson, the National Department of Health and other stakeholders. In addition, vaccines from these batches will be made available through the African Vaccine Acquisition Task Team/African Union platform. This represents a significant landmark for South Africa and the African continent as these are the first COVID-19 vaccines to be produced on the African continent, by an African producer for South African and African patients. Supplies will also be made to the European Union and other offshore markets. Stephen Saad, Aspen Group Chief Executive said, “Aspen is proud of the role we are playing in producing vaccines for distribution in South Africa, across Africa and the world. Our ability to produce these vaccines on behalf of Johnson & Johnson builds on our strategic vision of delivering high quality, affordable medicines that improve health outcomes for patients in our own country, continent and around the world.  Supply for Africa and South Africa is particularly rewarding, given the current global inequality in accessing vaccines. This represents a big step forward in ensuring that Africa can address its healthcare priorities. The manufacture of the Johnson & Johnson COVID-19 vaccine builds on the global contributions we have already made in fighting the COVID-19 pandemic with both our anaesthetics portfolio and dexamethasone supply.” ABOUT ASPEN’S GQEBERHA STERILE SITE Aspen has invested in excess of R3.0 billion at this sterile manufacturing site, based in the Eastern Cape, the single largest investment in the pharmaceutical industry in South Africa. The new sterile facility contains high-technology, state-of-the-art pharmaceutical equipment and systems that will be used to manufacture advanced sterile medicines, including vaccines. These investments at the Gqeberha manufacturing site, which has been a cornerstone of both local antiretroviral and multi drug-resistant TB manufacture, demonstrate Aspen’s ongoing and enduring commitment to South Africa and the continent. With roots firmly embedded in African soil, a continent which carries a disproportionately high disease burden, the investment in advanced pharmaceutical technology enables Aspen to continue to contribute to improved access to treatment, respond to public health emergencies and to create significant economic, export and job creation opportunities. This facility allows Aspen to manufacture multiple and complex sterile products, such as vaccines and Aspen’s global anaesthetics. It will also ensure quality and security of both domestic and international supply. ABOUT ASPEN’S COLLABORATION WITH JOHNSON & JOHNSON It is with much pride and gratitude that Aspen has collaborated with Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica, NV, two of the Janssen Pharmaceutical Companies of Johnson & Johnson, which have demonstrated their commitment to equitable access to COVID-19 vaccines. Aspen’s Gqeberha site is the only manufacturing site on the African continent and in the southern hemisphere selected by a global multinational pharmaceutical company of this magnitude to contract manufacture COVID-19 vaccines.

  • CNN Live – Aspen’s US$700m investment in equitable vaccine access for Africa
    on 08.07.2021

    "Over 90% of our vaccines are imported. A high majority from #India. When India cut off all exports, #Africa was left without vaccines." Stephen Saad, CEO @aspenpharma discusses their recent $700M investment & ensuring future Africa supplies. https://player.vimeo.com/video/572460429 CNN Live with Julia Chatterley

  • Aspen statement on manufacture and supply of COVID-19 vaccines
    on 14.06.2021

    Durban – Aspen, a global multinational specialty pharmaceutical company, was extremely disappointed to learn over the past weekend that specific batches of the Johnson & Johnson COVID-19 vaccine manufactured at our Gqeberha production site and designated for the South African market have to be destroyed due to the Good Manufacturing Practice risk of isolated material…

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