Gr Grou oup Inte terim rim Res esults lts 2010 10
Economic Sustainability Highlights Performance indicators positive Product pipeline offers significant future value No manufacturing capacity constraints Successful ARV tender award validates production competitiveness Sigma acquisition concluded (January 2011) Oncology joint venture divestiture concluded (February 2011) Net debt reduced 29% (R900 million) Working capital under control 2
Social Sustainability Highlights Qualified for the JSE Social Responsibility Index (November 2010) Two new Aspen sponsored clinics opened Volksrust Daggakraal More than 1500 employees participated in skills enhancement programmes More than 1200 employees participated in the HIV/AIDS voluntary testing and counselling programme across South Africa and East Africa 5% positive incidence Aspen medicines treating approximately 1 million HIV/AIDS patients across Africa 3
Environmental Sustainability Highlights A group-wide environmental management protocol introduced Energy and water conservation initiatives in place in South Africa and Tanzania S0₂ emissions tested in Port Elizabeth and East London sites and found to be negligible A 10% reduction in land filled waste achieved from the Port Elizabeth site Feasibility study commissioned for alternative energy sources at Port Elizabeth site 4
Performance Highlights F rom Contin u in g Op eration s Revenue + 33% + 28% Operating profit Headline earnings + 35% + 15% Headline earnings per s hare 5
Income Statement Re-Analysed 6 Months Ended 6 Months Ended % Change 31 Dec 2010 31 Dec 2009 R’m R’m Revenue from continuing operations 5 990 4 519 33% Cost of sales (3 381) (2 441) Gross profit 2 609 2 078 26% Net operating expenses (1 051) (921) Other operating income 108 150 EBITA 1 666 1 307 27% Amortisation (52) (47) Operating profit 1 614 1 260 28% Net funding costs (124) (174) Share of after tax loss of associates - (1) Profit before tax 1 490 1 085 37% Tax (323) (239) Profit after tax from continuing operations 1 167 846 38% EPS from continuing operations 267.1 cents 229.1 cents 17% HEPS from continuing operations 265.3 cents 230.8 cents 15% 6
Analysis of Segmental Revenue Gros s Reven u e by Cu sto mer Geograp hy R6 . 4 b n (2 0 0 9 : R4 . 6 b n ) 3300 2550 R’millions 957 867 748 666 599 500 493 279 South Africa Sub-Saharan Africa Asia Pacific Latin America Rest of the World 6 Months Ended 31 December 2010 2009 7
Operating Profits before Amortisation and Once Offs Operating Profit Once Offs * Normalised Amortisation Operating Profit Rm Rm Rm Rm S o u t h A f r i c a 2010 996 25 (8) 1 013 2009 810 (24) 803 17 S u b - S a h a r a n A f r i c a 119 (9) 2010 1 111 41 - 4 45 2009 I n t e r n a t i o n a l 499 26 26 551 2010 409 26 - 435 2009 To t a l 1 614 10 1 675 2010 52 1 260 (24) 2009 47 1 283 * Once offs comprise impairments, profits on sale, capital insurance proceeds and transaction costs 8
Segmental Profit Analysis Normalised Operating Margin % Normalised operating profit before amortisation (EBITA) as a percentage of gross revenue 6 Months Ended Year Ended 6 Months Ended Dec 2010 June 2010 Dec 2009 South Africa 30% * 28% * 29% * Sub-Saharan Africa 17% 8% 16% International 23% 28% 25% Group 26% * 26% * 27% * * Adjusted to exclude effect of compensation for loss of profits received from insurers in respect of Aspen Nutritionals Group EBITA % Trend * Analysis of EBITA R2.8bn R2.3bn 39% 44% R1.7bn 3% 30% R1.3bn R1.2bn 33% 27% 27% 26% 26% 15% 12% 8% 3% 7% 5% 58% 48% 83% 82% 60% 2007 2008 2009 2010 H1 2011 2007 2008 2009 2010 H1 2011 South Africa Sub-Saharan Africa International 9
Abridged Balance Sheet 31 Dec 2010 30 June 2010 Rm Rm Assets Non-current assets 11 317 12 178 Tangible fixed assets 2 833 3 012 Goodwill 456 456 Intangible assets 7 919 8 610 Other non-current assets 109 100 Current assets 5 516 4 683 Cash 3 810 2 940 20 643 19 801 Equity and Liabilities Capital and Reserves 11 262 10 886 Non-current liabilities 3 261 3 085 384 387 Preference share – liability 2 446 2 260 Long term interest bearing debt Other non-current liabilities 431 438 Short term interest bearing debt 3 511 3 721 Other current liabilities 2 609 2 109 20 643 19 801 10
Capex Investment Trend I nvestment in Tan gib le As s ets – R2. 2b n in 4½ years 632 627 R’millions 379 310 288 2007 2008 2009 2010 H1 2011 11
Abridged Cash Flow Statement 6 Months Ended 6 Months ended 6 Months Ended 31 Dec 2010 30 June 2010 31 Dec 2009 R’m R’m R’m Cash flows from operating activities Cash operating profit 1 808 1 788 1 482 Working capital requirements (875) (28) (316) Cash generated from operations 933 1 760 1 166 Net funding costs paid (119) (238) (190) Tax paid (127) (280) (185) Net inflow from operations 687 1 242 791 Operating cash flow per share 159.0 cents 291.6 cents 198.7 cents 27% Working capital as a % of sales 24% 30% 12
Borrowings and Gearing Net Borrowings 4,039 3,041 R’millions 2,147 1,597 497 2007 2008 2009 2010 H1 2011 18% 24% 29% 40% 48% 52% 60% 71% 76% 82% Debt Equity 13
Sigma Transaction Completed on 31 January 2011 Purchase consideration of AUD 900 million paid in cash Mix of funding sources South Africa (ZAR) Aspen Global (USD) Aspen Australia on takeout of bridge facility (AUD) Combination of cash and debt Blended interest rate of approximately 7% pa (variable with base rates) Required to dispose of 3 minor products in terms of Competition ruling Financial base position Revenue approximately AUD 450 million EBIT approximately AUD 75 million Revenue reset from >AUD 600 million Exclusion of re-wholesaling business which Sigma classified as pharma 14
Sigma Transaction Grou p Ef fec ts to 3 0 Ju n e 2 0 1 1 HEPS close to neutral Transaction and restructuring costs of more than R100 million likely Net debt of approximately R7 billion Gearing of 35% to 40% Potential purchase price adjustment in working capital true up 15
Distribution of Fund Managers As at December 2010 As at June 2010 As at December 2009 Europe 25% South Europe 24% South Europe 23% South Africa 49% Africa 43% Africa 38% Asia Pacific Asia Pacific Asia Pacific 3% 2% 2% Middle East Other 1% Other 1% 1% North North North America America America 29% 35% 24% 16
Generics Bulletin Report : May 2010 Teva [incl Ratiopharm] (1,4,5) Sandoz Mylan(2) Watson(3) (1) Sales exclude Ratiopharm; brand sales include Copaxone sales of USD2.83 million Stada(4) (2) Generics sales growth was 9.2% Hospira(6) (3) Includes Arrow from December 2009 Perrigo(7,8) (4) Reported in Euros, converted at EUR1=USD1.4 Aspen incl Sigma (17,18, 19) (5) Excludes Mepha, which was sold separately to Cephalon for about USD600 million Greenstone[Pfizer](9) (6) Speciality injectable sales only Dr Reddy(10,15) (7) Financial year end 27 June 2009 Ranbaxy (8) Includes OTC sales of USD1.64 billion Fresenius Kabi (4,11,12) (9) IMS Health figures for US only Sanofi[Winthrop] (4,12) (10) Financial year end 31 March 2010 Gideon Richter(4) (11) Injectables sales only Krka(4) (12) Organic growth quoted Covidien(13,14) (13) Speciality Pharma and API sales only Cipla(10,15) (14) Financial year ended 25 September 2009 Alapis(4,16) (15) Reported in Indian rupees; converted at USD1 =Rs45 Par (16) Human health sales only, including brands distributed for third parties Orion(4) (17) Financial year end 30 June 2009 Lupin(10,15) (18) Reported in South African rand; converted at USD1 = R7.5 Sun(15,20) (19) Transaction completed 31 January 2011. Reported Sigma sales to financial year Wockhardt(15) end 31 January 2010, converted at USD1=AUD1 Zylus Cadila(10,15) (20) Fourth quarter of 2009-9 plus nine months of 2009-2010 Pharmastandard(21,22) (21) Reported in Russian roubles; converted at USD1=RUR30 Aurobindo(15,20) (22) Includes OTC sales of USD 493 million Hikma (23) Reported in Hungarian forints; converted at USD1=Huf190 (24) Financial year to September 2009 Egis(23,24) (25) Reported in Japanese yen; converted at USD1=Y92 Sawai(10,25) (26) Pharmaceutical sales only, including OTC sales of USD 172 million Biocon(10,15) (27) Financial year to 21 March 2009 Glenmark(15,20) Towa(10, 25) Torrent(10,15) Figures have been quoted for 2009 calendar year wherever possible, showing growth compared with previous year. Adcock(18, 24,25) Results not reported in dollars have been converted at the rates shown, but growth figures are as reported. Taro Business breakdowns are mostly according to companies' own definitions (Source - Company reports) Impax Strides(15) Turnover (USD'millions) Orchid(15, 27) 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 Generics API's Brands Other 17
in South Africa
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