2020 INTERIM RESULTS PRESENTATION For the six months ended 31 December 2019
DISCLAIMER CAUTIONARY REGARDING FORWARD-LOOKING STATEMENTS We may make statements that are not historical facts and relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable. These are forward looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “prospects”, “believe”, “anticipate”, “expect”, “intend”, “seek”, “will”, “plan”, “indicate”, “could”, “may”, “endeavour” and “project” and similar expressions are intended to identify such forward looking statements, but are not the exclusive means of identifying such statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and there are risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. If one or more of these risks materialise, or should underlying assumptions prove incorrect, actual results may be very different from those anticipated. The factors that could cause our actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements are discussed in each year’s annual report. Forward looking statements apply only as of the date on which they are made, and we do not undertake other than in terms of the Listings Requirements of the JSE Limited, any obligation to update or revise any of them, whether as a result of new information, future events or otherwise. Any profit forecasts published in this report are unaudited and have not been reviewed or reported on by Aspen's external auditors. 2
DISCLOSURE NOTE • Results separately disclose discontinued operations arising from the completed disposals of the Nutritionals business, Non-core pharmaceutical portfolio in the Asia Pacific region, Japanese business and Public sector ARVs. • Adoption of new IFRS 16 Leases Retrospectively applied from 1 July 2019, using a modified retrospective approach Comparatives are not restated under this approach • Segmental analysis Turkey has been moved to MENA from Developed Europe and consequently comparatives have been restated to reflect this segmental change 3
FINANCIAL REVIEW
FINANCIAL SUMMARY CONTINUING % Change ge v vs PY R’millio illion ER * H1 2020 1 2020 Reporte ted CER Net r reven enue e 18 417 3% 3% Gross ss p profit 9 410 9 410 -3% 3% -3% 3% Gross profit margin 51.1% 54.1% 54.0% Normalis lised ed EBITDA 5 260 5 260 0% 0% 0% 0% Normalised EBITDA margin 28.6% 29.3% 29.3% Normalis lised ed tax (610 610) 5% 5% 4% 4% Normalised effective tax rate 15.9% 15.3% 15.3% NHEPS PS (cents) 707 707 1% 1% 0% 0% Oper erating ing cash f h flow p w per er s share ( (cen ents) 556 556 104% 104% Oper erating ing cash c h conversio ion 87% 87% Total d l deb ebt 37 931 37 931 -29% 29% ITDA ^ Net debt / / EBIT 3.53x 3. 53x *CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates ^ Calculated in terms of Facilities Agreement covenant measure 5
SEGMENTAL (CER) CONTINUING Regional Brands Sterile Focus Brands H1 2020 4628 8284 H1 2020 3940 6962 H1 2019 (CER) 4627 7834 H1 2019 (CER) 7120 3975 • Regional Brands show revenue growth • Improved gross profit percentage from Sterile Focus, despite lower sales. Gross profit percentage is benefiting notwithstanding declines in the oncology portfolio from a higher relative weighting of Anaesthetics and previously reported Zantac recall. Gross profit flat Manufacturing Gross profit percentage Group 54.0% 51.1% H1 2020 3171 842 Regional Brands 59.1% 55.9% H1 2019 (CER) 1081 2984 Sterile Focus Brands 55.8% 56.6% • Revenue upside from recommencement of heparin API sales, gross profit percentage aligned to FY 2019 Manufacturing 36.2% 26.6% • Gross profit percentage reduced, but ahead of H2 2019 Gross profit Revenue H1 2019 (CER) H1 2020 CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates 6
GROSS MARGIN PERCENTAGE (CER) CONTINUING Group Regional Brands 54.0% 59.1% 52.2% 57.8% 51.1% 56.5% 50.3% 55.9% H1 2019 H2 2019 FY 2019 H1 2020 H1 2019 H2 2019 FY 2019 H1 2020 Sterile Focus Brands Manufacturing 59.9% 36.2% 56.5% 56.6% 55.8% 26.3% 26.6% 16.0% H1 2019 H2 2019 FY 2019 H1 2020 H1 2019 H2 2019 FY 2019 H1 2020 CER reflects the underlying operational performance. H1 2019, H2 2019 and FY 2019 restated at H1 2020 average exchange rates 7
NORMALISED EBITDA CONTINUING ) * R'millio illion H1 2020 1 2020 % o of r reven enue H1 2019 ( 1 2019 (CER) % o of r reven enue % ch change Gross profit ** 9 410 51.1% 9 683 54.0% -2.8% Operating expenses (4 821) -26.2% (4 801) -26.8% 0.4% Net other operating income 220 1.2% 15 0.1% >100% Depreciation 451 2.5% 363 2.0% 24.4% Normalis lised ed E EBITDA 5 260 5 260 28. 28.6% 6% 5 260 5 260 29.3% 29. 3% - Decline in gross profit percentage partially offset by well controlled operating expenses & upside in other operating income *CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates ** Gross profit is after deduction of depreciation 8
CURRENCY IMPACT CONTINUING Contribution t to Contribution t to Aver erage FX e FX R Rates es to Z ZAR H1 2020 1 2020 FY 2019 2019 H1 2019 1 2019 rev evenue Normalis lised ed EBITDA EUR 31% 18% 16.30 16.19 16.34 AUD 11% 20% 10.05 10.15 10.27 CNY 9% 20% 2.09 2.08 2.07 USD 6% -22% 14.69 14.19 14.19 • Low year on year volatility in currency • ZAR contribution Revenue: 18% Normalised EBITDA: 12 % • Relative contribution affected by Mix Discontinued businesses Switch in supply currency (EUR to USD) 9
EFFECTIVE TAX RATES CONTINUING 28.6% 30% • The Group’s effective tax rate spiked in FY 2019 due to higher impairments in that year 25% • Normalised effective tax rate eliminates the periodic spikes and other 18.1% non-trading items 20% 17.0% 16.6% • Normalised effective tax rate in H1 2020 is 0,5% greater than FY 2019 15% 15.9% 15.4% 15.4% 15.3% • Increase is slightly lower than anticipated due to 10% A change in mix of contributions to total operating profit by Group companies 5% Benefits from the utilization of tax losses • No material change to the normalised effective tax rate is expected FY 2018^ H1 2019 Restated* FY 2019 Restated* H1 2020* for FY 2020 Group effective tax rate Group normalised effective tax rate ^ Includes Japan, SA public sector ARVs and excludes Nutritionals & Asia Pacific non-core pharmaceuticals *Excludes Japan, SA public sector ARVs, Nutritionals & Asia Pacific non-core pharmaceuticals 10
RECONCILIATION OF CER NHEPS CONTINUING ) * Cents H1 2020 1 2020 H1 2019 ( 1 2019 (CER) % ch change Basic ic e earnin nings gs p per er s share e (EPS) 533. 533.0 594.2 594. -10% 10% Profit on sale of property, plant and equipment 1.1 0.1 >100% Impairment of property, plant and equipment 1.7 1.5 13% Impairment of intangible assets 107.1 45.8 >100% Reversal of impairment of PPE (0.2) (0.1) >100% Reversal of impairment of intangible assets (0.4) - 100% Impairment of goodwill - - - Impairment of available for sale financial assets - - - Profit on sale of assets classified as held-for-sale (4.3) - 100% Loss on sale of intangible assets - 0.1 >100% Headlin dline e earnin nings gs p per er s share ( e (HEPS) 638. 638.0 641. 641.6 -1% 1% Capital raising fees 4.1 9.6 -57% Restructuring costs 29.5 12.6 >100% Transactions costs 33.3 35.9 -7% Product litigation costs 9.3 7.0 33% Reversal of deferred consideration no longer payable - - - Foreign exchange gain relating to acquisition (7.2) 0.1 >100% Normalis lised ed HEPS 707. 707.0 706.8 706. - *CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates 11
NHEPS BRIDGE (CER) CONTINUING R’MILLION 3 227 3 226 -28 -72 142 -40 South Africa - ZAR 23% International - EUR 69% Normalised HEPS (CER) Normalised EBITDA Depreciation Amortisation Finance costs Normalised HEPS (Reported) - 31 December 2018 - 31 December 2019 CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates Depreciation, amortisation and finance costs shown on an after-tax basis 12
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