Aspen Pharmacare Holdings Limited · JSE:APN
Aspen Pharmacare — FY2012 Earnings Presentation
95 slides from Aspen Pharmacare's earnings presentation, 2012
Slide 1: 2012 Year End Results Presentation
2012 Year End Results Presentation
Slide 2: Agenda
AGENDA Vision GUS ATTRIDGE Financial results GUS ATTRIDGE Aspen’s global strategy STEPHEN SAAD Business performance STEPHEN SAAD Outlook STEPHEN SAAD 2
Slide 3: Aspen vision
Vision Aspen vision “To deliver value to all our stakeholders as a responsible corporate citizen that provides quality affordable medicines globally.” 3
Slide 4: Delivering value to all our stakeholders
Vision Delivering value to all our stakeholders ► Growth >20% in revenue, profit, HEPS ► Distribution +50% ► Rising share price ► Exponential returns for BEE shareholders ► Investing in skills of our employees ► A product pipeline which creates improved access to quality medicines ► Benefitting supp
Slide 5: Responsible corporate citizens
Vision Responsible corporate citizens ► Investing in the future: products, manufacturing, people ► Supporting the communities where we operate ► Delivering on BBBEE: Level 3 value adding entity ► Leading supplier of ARVs in South Africa ► Environmentally aware ► Integrity is a core value 5
Slide 6: Providing quality, affordable medicines globally
Vision Providing quality, affordable medicines globally ► Supplying medicines to more than 150 countries ► Expanding territorial coverage ► Increasing product ranges ► Leading supplier of medicines in South Africa, Sub Saharan Africa and Australia ► Raising production standards 6
Slide 7: Financial Performance Highlights
Financial results Financial Performance Highlights Revenue +23% R15.3 billion from continuing operations Normalised headline earnings +22% R2.9 billion from continuing operations Normalised diluted headline earnings per share +22% 636 cents from continuing operations Capital distribution to sharehol
Slide 8: Abridged Income Statement
Financial results Abridged Income Statement Year ended Year ended 30 June 2012 30 June 2011 % R'million R'million change CONTINUING OPERATIONS Revenue 15 256 12 383 +23% Gross profit 7 276 5 614 +30% Net operating expenses -3 123 -2 321 EBITA 4 153 3 293 +26% Amortisation -212 -144 Operating profit
Slide 9: Reconciliation of 2012 Earnings
Financial results Reconciliation of 2012 Earnings Earnings Per share R'million Cents Earnings attributable to equity holders 2 818 645.8 Discontinued operations -159 -36.5 Earnings from continuing operations 2 659 609.3 Impairments 176 40.4 Headline earnings 2 835 649.7 Restructuring costs 52 11.9 T
Slide 10: Comparative reconciliation of EPS
Financial results Comparative reconciliation of EPS Year ended Year ended % 30 June 2012 30 June 2011 change Cents Cents Basic earnings per share (EPS) 645.8 595.5 +8% Discontinued operations -36.5 -100.3 Basic EPS from continuing operations 609.3 495.2 +23% Impairments 40.4 21.1 Other - -5.4 Headli
Slide 11: Segmental contribution
Financial results Segmental contribution Gross Revenue 2011 Gross Revenue 2012 South Africa International 48% 19% International South Africa 15% 38% Asia Pacific 23% Asia Pacific Sub-Saharan 37% Sub-Saharan Africa Africa 10% 10% Normalised EBITA 2011 Normalised EBITA 2012 International International
Slide 12: Gross Revenue from Continuing Operations
Financial results Gross Revenue from Continuing Operations 7 000 +97% 6 000 0% 5 000 R'million 4 000 3 000 2 000 +27% -11% -11% +11% 1 000 - SA Pharma SA Consumer Sub-Saharan Asia Pacific Latin America Rest of the Africa World 2011 2012 ACCORDING TO CUSTOMER GEOGRAPHY 12
Slide 13: Group Operating Margin
Financial results Group Operating Margin 18 000 16 356 35.0% 16 000 14 000 27.2% 27.1% 13 214 30.0% 26.9% 27.0% 12 000 10 088 25.0% Margin % R'million 10 000 8 442 26.4% 8 000 20.0% 6 000 4 683 4 000 15.0% 2 000 - 10.0% 2008 2009 2010 2011 2012 Gross revenue Group margin Based on Gross revenue and N
Slide 14: South African business review
Financial results South African business review 7 500 50% 6 000 40% 4 500 30% Margin % R'million 3 000 20% 1 500 10% - 0% 2009 2010 2011 2012 Normalised EBITA 1 102 1 639 1 934 1 768 Revenue 4 309 5 576 6 296 6 160 Operating margin 26% 29% 31% 29% ► Business performance ► Outlook Difficult H1 due
Slide 15: Asia Pacific business review
Financial results Asia Pacific business review 7 500 50% 6 000 40% 4 500 30% Margin % R'million 3 000 20% 1 500 10% - 0% 2009 2010 2011 2012 Normalised EBITA 114 176 642 1 460 Revenue 915 1 278 3 004 6 021 Operating margin 12% 14% 21% 24% ► Business performance ► Outlook Revenue growth of both ori
Slide 16: International business review
Financial results International business review 3 000 60% 2 500 50% 2 000 40% Margin % R'million 1 500 30% 1 000 20% 500 10% - 0% 2009 2010 2011 2012 Normalised EBITA 901 847 735 939 Revenue 2 286 2 325 2 614 2 523 Operating margin 39% 36% 28% 37% ► Business performance ► Outlook Continued growth
Slide 17: Sub-Saharan Africa business review
Financial results Sub-Saharan Africa business review 2 000 30% 1 500 20% Margin % R'million 1 000 10% 500 - 0% 2009 2010 2011 2012 Normalised EBITA 178 72 177 248 Gross Revenue 931 910 1 301 1 652 Operating margin 19% 8% 14% 15% ► Business performance ► Outlook Good performance by all underlying b
Slide 18: Abridged Statement of Financial Position
Financial results Abridged Statement of Financial Position As at As at 30 June 30 June R'million R'million ASSETS Non-current assets 21 287 17 423 Fixed assets 3 807 3 652 Intangible assets 11 870 8 917 Goodwill 5 344 4 627 Other non-current assets 266 227 Current assets 7 118 6 335 Cash 3 314 3 039
Slide 19: Operating Cash Flows
Financial results Operating Cash Flows Year ended Year ended 30 June 2012 30 June 2011 % change R'million R'million Cash operating profit 4 746 3 845 +23% Changes in working capital -870 -463 Cash generated from operations 3 876 3 382 +15% Net finance costs paid -514 -401 Tax paid -454 -535 Cash gen
Slide 20: Investment in Property, Plant & Equipment
Financial results Investment in Property, Plant & Equipment 700 630 636 651 600 500 470 382 R'million 400 289 253 300 215 168 200 119 60 75 100 - 2007 2008 2009 2010 2011 2012 Capital Expenditure Depreciation MORE THAN R3 BILLION SPENT ON CAPEX OVER 6 YEARS 20
Slide 21: Debt and Liquidity trends
Financial results Debt and Liquidity trends Operating net cash flows vs net debt Capital composition 8 000 100% 7 068 6 729 90% 24% 7 000 29% 29% 34% 80% 40% 6 000 52% 70% 5 000 4 432 60% Percentage R'million 4 000 3 428 50% 2 910 40% 3 000 76% 2 446 71% 66% 71% 2 011 2 033 30% 60% 2 000 48% 977 1 2
Slide 22: Corporate Activity: GSK OTC Brands
Financial results Corporate Activity ► GSK OTC Brands Purchase consideration of R2.1 billion Excellent geographic fit: Asia Pacific, SA/SSA and LATAM Household brands e.g. Phillips Milk of Magnesia, Dequadin, Zantac, Borstol Revenue of GBP60 million in 2011; high margin percentage Aspen to
Slide 23: Corporate Activity: GSK Classic Brands
Financial results Corporate Activity ► GSK Classic Brands Purchase consideration of R2.2 billion For distribution in Australia Strong brand equity e.g. Augmentin, Amoxil, Valtrex, Zofran Revenue in six months to June 2012 of AUD47 million Declining revenue trend: Valtrex patent expiry; pri
Slide 24: Corporate Activity: Enablex and Tofranil
Financial results Corporate Activity ► Enablex and Tofranil Acquired from Novartis Purchase consideration of R442 million Enablex: For treating overactive bladder – patent protected until +/- 2016 Tofranil: Anti-depressant – long since patent expired Combined revenue of USD15 million; high
Slide 25: Corporate Activity: Disposals
Financial results Corporate Activity ► Disposals Campos facility and related hospital products in Brazil ⁻ Disposal completed 1 July 2011 ⁻ Profit after tax on disposal of R122 million Personal care products ⁻ Toothpaste brands in South Africa sold in September 2011 ⁻ Profit after tax on disposa
Slide 26: Revenue consensus forecasts
Peer analysis Revenue consensus forecasts 2 500 2 000 USD million 1 500 1 000 500 - Ranbaxy Aspen Dr Sun Krka Gedeon Cipla Hikma Adcock Cipla Reddy's Pharma Richter (India) Ingram MedPro Revenue 2012A Revenue 2012F Revenue 2013F Source: Bloomberg sourced by JP Morgan (3 July 2012) Based on Bloomberg
Slide 27: EBITDA consensus forecasts
Peer analysis EBITDA consensus forecasts 750 600 USD millions 450 300 150 0 Sun Aspen Dr Ranbaxy Krka Gedeon Cipla Hikma Adcock Cipla Pharma Reddy's Richter (India) Ingram MedPro EBITDA 2012A EBITDA 2012F EBITDA 2013F Source: Bloomberg sourced by JP Morgan (3 July 2012) Based on Bloomberg annualised
Slide 28: EBITDA % consensus forecasts
Peer analysis EBITDA % consensus forecasts 50% 40% Margin in % 30% 20% 10% 0% Sun Krka Aspen Adcock Gedeon Cipla Cipla Dr Hikma Ranbaxy Pharma Ingram Richter MedPro (India) Reddy's EBITDA% 2012A EBITDA% 2012F EBITDA% 2013F Source: Bloomberg sourced by JP Morgan (3 July 2012) Based on Bloomberg annua
Slide 29: PE consensus forecasts
Peer analysis PE consensus forecasts 30 Price-earnings ratio 25 20 15 10 5 0 Sun Cipla Aspen Dr Gedeon Ranbaxy Adcock Hikma Cipla Krka Pharma (India) Reddy's Richter Ingram MedPro PE 2012A PE 2012CY PE 2013CY Source: Bloomberg sourced by JP Morgan (3 July 2012) Based on Bloomberg annualised consensu
Slide 30: Market capitalisation and Enterprise Values
Peer analysis Market capitalisation and Enterprise Values 14 12 10 USD million 8 6 4 2 0 Sun Aspen Dr Cipla Ranbaxy Gedeon Krka Hikma Adcock Cipla Pharma Reddy's (India) Richter Ingram MedPro Market Capitalisation Enterprise Value Market Capitalisation Actual Enterprise value Actual Source: Bloomber
Slide 31: Growth record since listing
Financial analysis Growth record since listing Growth in Gross Revenue since Listing Growth in EBITA since Listing Revenue CAGR = 47% EBITA CAGR = 51% 16 356 4 415 13 214 3 489 10 088 R'million R'million 2 735 8 441 2 295 4 683 4 026 1 194 1 260 3 449 1 010 2 815 837 2 202 632 1 104 1 561 1 890 300
Slide 32: Earnings vs share price growth
Financial analysis 10 year earnings vs share price growth 13 000 700 11 500 600 Closing share price in cents 10 000 500 HEPS in cents 8 500 7 000 400 5 500 300 4 000 200 2 500 100 1 000 -500 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 HEPS Closing share price at year end HEPS – total he
Slide 33: Share performance
Indexed share price growth (in multiples) 11 15 19 13 17 21 1 5 3 7 9 28/06/2002 28/10/2002 Financial analysis 28/02/2003 30/06/2003 31/10/2003 29/02/2004 30/06/2004 Share performance 31/10/2004 28/02/2005 30/06/2005 31/10/2005 28/02/2006 30/06/2006 31/10/2006 28/02/2007 30/06/2007 31/10/2007 29/02/
Slide 34: Distribution of Fund Managers
Shareholders analysis Distribution of Fund Managers As at June 2012 Europe 19% South Africa 52% Asia Pacific 3% Middle East 1% North America As at June 2010 25% As at June 2011 Europe Europe 25% South 19% Africa South 44% Asia Pacific Africa 3% Asia Pacific 54% 2% Middle East 1% Middle East 0% North
Slide 35: Aspen's position today
Global Strategy Aspen’s position today ► Large mature businesses in South Africa and Australia Strong market position Generate cash ► Growing businesses across other regions Foundations in place Need further scale to contribute more meaningfully Footholds that can now be expanded ⁻ Have po
Slide 36: What we do well
Global Strategy What we do well ► Integrate operations and commercial business Operations, part of success, not bureaucratic obstacle ► Execute well – culture of delivering to both ourselves and our partners ► Develop and commercialise a relevant/organic pipeline ► Synergies ex acquired products
Slide 37: What we focus on
Global Strategy What we focus on Inorganically ► Acquire more product Have more critical mass in existing and new territories Establish more LOCs versus distributors Employ more Aspen reps ⁻ Focus on Aspen products only ⁻ More credibility, substance for partners/multinationals ► Acquire local
Slide 38: Performance Objectives
Global Strategy Performance Objectives ► Sustained over performance is critical to our future success Meaningful market shares ⁻ Deliver better returns ⁻ Partners want to share in your success ⁻ Increasing the breadth/depth of the offering ► Attracts capable people Can Do and now Have Done mind
Slide 39: South Africa Headlines: Pharma
South Africa Headlines Pharma ► H2 – highest half revenue in history Surpassed H1 2011 ⁻ Included Seretide and Truvada pre-patent ⁻ Higher public ARV sales 12% > H1: 2012 Driven margins in growth ► Excluding private ARV’s Underlying private pharma growth – double digits ► Returned Leadership
Slide 40: South Africa Headlines: Consumer
South Africa Headlines Consumer ► Disappointed Underperformance of H1 being arrested ⁻ H2 > H1 and nearly in line with prior year ⁻ Pfizer was in Q3 last year IMF growing share OTC brands acquired from GSK ⁻ Add impetus South African Sales ► Exceptional performance achieved Challenges manage
Slide 41: South Africa Private Sector Pharmaceuticals
South Africa Private Sector Pharmaceuticals Total Private Market as at JUNE 2012 – R26.3 billion (R24.9bn at June 2011) Other R 0.8 bn Generics R 6.1 bn Branded R 12.3 bn OTC R 7.1 bn Aspen Branded -10,9%* Aspen Generic 13,0% *Seretide/Truvada effect Market Growth 9,6% Aspen Growth 3,0% 41 41
Slide 42: Manufacturer's Market Share of Scripts Dispensed
South African Private Sector Pharmaceuticals Manufacturer’s Market Share of Scripts Dispensed – June 2012 0.5% 0.6% 1.1% 2.8% Aspen 1.2% 29.1% Adcock Ingram 1.8% 2.5% 3.0% Sanofi Aventis 0.7% Novartis 3.0% Cipla-Medpro Pharmaceuticals Pfizer 6.8% Roche Astrazeneca 5.5% 23.1% Johnson and Johnson 2.9%
Slide 43: Generics – MAT Value Share
South African Private Sector Pharmaceuticals Generics – MAT Value Share June 2012 MAT Value Share of the Generics Market R6.1 bn (R5.3 bn 2011) 1% 1% 2% 8% Aspen 2% 2% Cipla-Medpro Pharmaceuticals 3% 31% Adcock Ingram 3% Novartis 4% Lupin Laboratories Sanofi 5% Daiichi Sankyo 5% Servier Pharmaplan 1
Slide 44: MAT Value Growth (Generic)
South African Private Sector Pharmaceuticals MAT Value Growth (Generic) Sanofi Lupin Laboratories Pharmaplan Cipla Medpro Aspen Novartis Pfizer Daiichi Sankyo Adcock Ingram Servier MARKET GROWTH DRIVEN BY SMALLER PLAYERS AND MULTINATIONALS 44
Slide 45: Aspen performance in recent tenders
South African Public Sector Aspen performance in recent tenders 2010 ARV Tender Aurobindo Specpharm Strides 3% 1% MSD 4% 0.50% Adcock 4% Cipla 5% 2012 OSD Tender Abbott Pharma Dynamics Aspen 3% 10% 41% Pfizer Laboratories Dezzo Trading 3% 2% Austell Laboratories Specpharm 6% 3% Cipla Medpro Pharmace
Slide 46: The Five Key Challenges
South Africa 2012 Review The Five Key Challenges ► Managing Legislation ► Patent expiry – Seretide 2012 sales R32m (> R150m) ► Patent expiry – Truvada 2012 sales R41m (> R150m) ► ARV public sector Lower share with lower margins Utilisation of donor stock ► Loss of Pfizer IMF license Sales
Slide 47: Challenge 1 – Managing Legislation (SEP)
South Africa 2012 Review Challenge 1 – Managing Legislation Single Exit Price (SEP) Increase (SEPI) ► March 2012 - 2.14% Margin contraction in SA business ⁻ Weak ZAR ⁻ Rapidly rising energy and labour costs ► Regulator looking to: Introduce regularity and consistency in SEPI timing Provide cer
Slide 48: Challenge 1 – International Benchmarking Practice
South Africa 2012 Review Challenge 1 – Managing Legislation International Benchmarking Practice (IBP) ► Regulator confirmed IBP intention is to increase access Not blunt instrument to cut prices ► Industry Task Group presently in negotiation with Government Likely to reach a negotiated settlemen
Slide 49: Challenge 1 – Logistics Fee Capping
South Africa 2012 Review Challenge 1 – Managing Legislation Logistics Fee (LF) Capping ► Intention is to reduce inflated LF’s which are deemed perverse Introduction of a maximum fee CAP ► Regulator has withdrawn previous proposed LF CAP Significant wholesaler push back ► Timing of new gazette un
Slide 50: Challenge 1 – Local Preference
South Africa 2012 Review Challenge 1 – Managing Legislation Local Preference - Pharmaceutical Sector Designation ► Government has formally designated Pharmaceuticals Tender by tender basis One of 6 priority sectors for industrial support ► Government underwrite minimum 70% volume award to a loca
Slide 51: Challenge 2 – Seretide patent expiry
South Africa 2012 Review Challenge 2 – Seretide patent expiry MORE VALUE 51
Slide 52: Challenge 2 – Seretide patent expiry
South Africa 2012 Review Challenge 2 – Seretide patent expiry NEARLY 50% VOLUME INCREASE IN THE MOLECULE DEMONSTRATION OF HOW GENERIC PRICING CREATES ACCESS 52
Slide 53: Challenge 2 – Seretide patent expiry
South Africa 2012 Review Challenge 2 – Seretide patent expiry FOXAIR ALONE DOING MORE UNITS THAN SERETIDE PRE-PATENT 53
Slide 54: Foxair #1 Generic Brand in SA
South Africa 2012 Review Challenge 2 – Seretide patent expiry Foxair # 1 Generic Brand in SA ► Largest generic brand in South African private market ► MAT June 2012: R114m ► Largest brand in Respiratory Therapeutic Class ► Launched 21 months ago: October 2010 707,523 units sold since launch 505,
Slide 55: Challenge – Truvada patent expiry
South Africa 2012 Review Challenge 3 – Truvada patent expiry Value of treatment SALES VALUE RECOVERED TRIBUSS – SOUTH AFRICA’S FIRST GENERIC 3 IN 1/ONCE A DAY ARV 55
Slide 56: Challenge 4 - State ARV tender offtake
South Africa 2012 Review Challenge 4 - State ARV tender offtake ARV Tender Revenue State ARV H1 2011 H2 2011 H1 2012 H2 2012 H2 2012 > H2 2011 ► Donor stock depleted ► MoH complimented Aspen on reliability of 5 tenders transferred to Aspen performance Ramped up to over a million packs for Posi
Slide 57: Challenge 5 - Infant Milk Formula recovery
South Africa 2012 Review Challenge 5 - Infant Milk Formula recovery Revenue 2011 - 2013 Pfizer Infacare 2011 2012 2013 Target VALUES IMPROVING FOCUS ON MARGIN AND INNOVATION 57
Slide 58: The Leading Pipeline
South Africa 2013 Prospects The Leading Pipeline Major launches include: Foxair Aspen Meropenem Tribuss Synflorix SIGNIFICANT CONTRIBUTION TO ASPEN’S ABSOLUTE GENERIC GROWTH 58
Slide 59: Return to Growth
South Africa 2013 Prospects Return to Growth ► One off 2012 events flushed out system ► SEP – formula yields 7% - 8% Likely to be 6% ► Organic volume growth from base business Annualisation of current pipeline Strong pipeline momentum to continue ⁻ Anticipate further high value launches ► ARV
Slide 60: South African Operations 2012 Review
South African Operations 2012 Review ► Has provided sustainable advantages to the Group Built to the highest quality standards Significant volume throughput Capacities available Space for expansion ► Local inflationary pressures offset Volume increase Depreciating Rand (exports) Produc
Slide 61: Accreditations and other Projects
South African Operations Accreditations and other Projects ► SVPs inspected by FDA – no major issues raised ► Hormonals – accredited by MCC ► High volume liquids – built and being re-aligned to East London ► Unit 1 solid production Increased capacity by 3.5 billion tablets Significant capacity e
Slide 62: Accreditations and other Projects
South African Operations Accreditations and other Projects ► Brands transferred Zyloric (Global Brand) – Europe complete ⁻ ROW in progress Australia – first brands approved and moved ⁻ Further product approvals imminent ► Global product – savings realised Over $11m in 2012 ($10m in 2011) Con
Slide 63: Manufacturing Strategy
South African Operations Manufacturing Strategy Mudie Lane (over 2 hectares acquired) Unit 3 : Packing Unit 2 : Oral Solids Technical Centre Unit 1 : Oral Solids Sterile Facility Bridgestone 63
Slide 64: Exponential Revenue Growth
Aspen Asia Pacific Review Exponential Revenue Growth Rands Millions 6021 3004 1278 915 709 396 509 235 309 7 65 109 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 64
Slide 65: Australia Market Shares
Australia Market Shares Market A$14.2 Billion Growth at +4.8% Pfizer 11.8% AstraZeneca Other 8.0% 41.1% Novartis 6.2% Sanofi 5.0% GSK 4.6% MSD Janssen 4.5% Abbott, Cilag Aspen Lilly 2.4% 2.9% Alphapharm Roche 3.2% 4.0% 3.1% 3.2% Source: MAT, IMS July 2012 INCLUSIVE OF ACQUIRED CLASSIC BRANDS ASPEN S
Slide 66: Australia Headlines
Australia Headlines ► Sales nearly in line with South Africa Base business up by 22% excluding Zyprexa (46% including Zyprexa) Sigma up 171% H2 Sigma up 39% ⁻ 5 months like for like up 19% ► PBS reforms resulted in biggest historic price cut Aspen products negatively affected by A$10m - A$15
Slide 67: Australia Headlines
Australia Headlines ► Synergies driving margin growth ► Australia’s number one generic player ► Generate more scripts than any other pharma company ► Organic base growth Double digit Cost savings to drive margin and volume ► Great team effort Tough market Highly regulated Performing brilli
Slide 68: Generic value leader - 16% market share
Australia Generic value leader - 16% market share Australia total generic market = A$1.97bn* A$31 m Aspen A$39 m A$306 m Alphapharm 1.6% A$332 m 2.0% Apotex 15.6% 16.9% Sandoz A$83 m Pfizer A$303 m Sanofi 4.2% A$86 m 15.4% Hospira 4.4% Ascent A$87 m A$180 m A$297 m Bayer A$219 m Inova 4.4% 9.2% 15.1
Slide 69: Generic volume leader – 24% market share
Australia Generic volume leader – 24% market share Australia total generic market = 6.8bn SU* Australia: Top Generic Players (millions SU) Aspen Alphapharm 1.5% 1.8% 12.5% Apotex 1.9% Sandoz 2.3% 24.0% Sanofi 3.1% Ascent 7.1% Pfizer Reckitt Benckiser 23.1% 9.1% Pharmacare 13.5% Glaxosmithkline Other
Slide 70: Cost Synergies – Driving Market Growth
Australia Cost Synergies – Driving Market Growth ► Synergies from Consolidation of ⁻ Sales teams ⁻ Manufacture and distribution ⁻ Quality assurance ⁻ Closure of head office Integration processes ⁻ Reduction of operational cost Reductions in cost of goods ⁻ procurement and manufacturing savings
Slide 71: Growing the Business
Australia Growing the Business ► Position ourselves as one stop shop Branded/Generic and OTC A to Z, look to us first, then the others ► Quality products/Affordable More volumes % than value % Comfort around sustainability ► Drive organic pipeline Aspen has numerous products in registratio
Slide 72: Growing the Business
Australia Growing the Business ► Drive inorganic/partnership model Important multinational distribution partners ⁻ Merck ⁻ Novartis ⁻ Eli Lilly ⁻ Sanofi ► Performance and positioning driving future opportunities with multinationals Acquisition of brands Distribution agreements Licensing arra
Slide 73: Acquisition of GSK Classic Brands
Australia Acquisition of GSK Classic Brands ► Aspen has a strong understanding of these brands Market them in South Africa ► Post patent - focus on Commercial levers ⁻ Pricing and positioning Line extensions to existing brands Drive down cost of goods ⁻ Sustainability competitive ► Acquisiti
Slide 74: Relevance – 1 in 5 scripts for an Aspen product
Australia Relevance – 1 in 5 scripts will be for an Aspen owned or distributed product Share of Scripts generated Aspen & GSK Classic Brands, 20.2% Others, 24.2% Servier, 2.3% *Generic, 12.2% BI, 2.8% * Script written as molecule not MSD, 3.3% brand. GSK - Albiston, 5.2% Sanofi, 8.7% Alphapharm, 6.7
Slide 75: Australia Prospects 2013
Australia Prospects 2013 ► Drivers in place to grow top line ► Operating income growth Higher sales Further synergies Annualised synergy from 2012 ⁻ After price cuts ► Further growth Organic pipeline Acquisitions 75
Slide 76: Australia Prospects 2013
Australia Prospects 2013 ► Although 20% of scripts written 16% of scripts dispensed Manage substitution ⁻ Well placed with our commercial teams to achieve this ⁻ Aspen strength ⁻ Dispensed > written ► Challenging market Weathered price cuts Competitors under pressure Aspen team is Australi
Slide 77: Asia Pacific: A Key Focus Area
Asia Pacific A Key Focus Area In-market Aspen sales in Asia Hong Kong Singapore 5% China 2% 4% Indonesia 4% Thailand 5% Malaysia 6% Japan USD 63 mil 45% Taiwan 8% Korea 9% Philippines 12% MONITOR THIS REGION 77
Slide 78: Key focus area for Aspen's Global Strategy
Asia Pacific Key focus area for Aspen’s Global Strategy ► Regional Challenge Asia’s contribution needs in time to surpass Australia’s ⁻ Aspen Australia sales > $700m ⁻ Aspen Asia sales < $70m ► To achieve this objective Setting up country operations ⁻ Capitalise on growth opportunities Explori
Slide 79: Aspen Philippines
Asia Pacific Aspen is setting up country operations to capitalize growth opportunities in Asia Aspen Philippines ► Oct 2011 – Incorporated ► Dec 2011 - Acquired 2 pharmaceutical brands ► Mar 2012 - Officially launched ► Apr 2012 – 100 reps in the field ► Sales forecast to double in 2013 OWN SALES TE
Slide 80: Aspen Malaysia and Taiwan
Asia Pacific Aspen setting up country operations to capitalize on growth opportunities in Asia Aspen Malaysia ► Jun 2012 – Incorporated Sales forecast to double in 2013 Aspen Taiwan ► Incorporation in progress Sales forecast to increase 60% in 2013 Countries under evaluation Phase 1 ► Thailand,
Slide 81: LATAM Market Segmentation
LATAM Market Segmentation ► Focused approach to LATAM Mexico ► Divided into 6 focus areas Aspen Brazil Aspen Mexico Aspen Venezuela Aspen Andean ⁻ Columbia ⁻ Ecuador ⁻ Peru ⁻ Bolivia Aspen Argentina ⁻ Argentina ⁻ Chile ⁻ Paraguay ⁻ Uruguay Aspen Caricam ⁻ Central America; plus ⁻ The Cari
Slide 82: LATAM: A Strategic Focus
LATAM A Strategic Focus ► Sales now exceed R1bn Rm % 2012 2011 Brazil 576 503 15% Spanish LATAM 448 422 6% 1 024 925 11% ► Numbers sanitised use this annual base to assess future performance H1/H2 sales cut off effected by global brand transfers Spanish LATAM annual effect of transition ► Privat
Slide 83: LATAM: A Strategic Focus
LATAM A Strategic Focus ► Exited tender/commodity markets Negative sales effect Positive profit effect ► Strong retail/private market growths in Brazil/Venezuela Supported by strong organic pipeline Start of roll out of pipeline introduced 2 years ago Growth in global brands CONFIDENCE IN
Slide 84: Global Brand - Zyloric
Brazilian Private Market Global Brand - Zyloric 2007 677 Pre-Transition 2008 681 Pre-Transition 2009 673 Pre- Transition 2010 591 Pre-Transition 2011 852 Aspen Pre - Transition Aspen FOCUS ON GLOBAL BRANDS – DRIVING SALES GROWTH 84
Slide 85: New Product Launch – Insunorm
Brazilian Private Market New Product Launch Insunorm Quarterly Unit Sales 100 000 90 000 87 691 80 000 Units 70 000 69 298 60 000 61 668 50 000 51 123 45 554 40 000 37 181 30 000 20 000 14 216 10 000 6 317 - Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2011 2011 2011 2012 2012 2012 2012 CREDIBILITY AND CAPABILITY –
Slide 86: LATAM Prospects
LATAM Prospects ► Clear plan for all 6 regional heads ► Growth strategy not always the same e.g. Caricam ⁻ Small fragmented markets ⁻ Individually small, collectively meaningful Brazil, Mexico, Venezuela ⁻ Large markets, individually meaningful ► Caricam Ideally looking for a platform company
Slide 87: LATAM Prospects
LATAM Prospects ► Mexico, Brazil, Venezuela Organic base business growth Focus on retail private market performance Product acquisitions/licensing Roll out of organic pipeline ⁻ Harvesting the earlier efforts ► Steeper regional growth trajectory forecast for 2012 LIKE ASIA, NOW HAVE A CLEAR
Slide 88: LATAM New Product Pipeline Brazil
LATAM New Product Pipeline Brazil Launches Financial Year 2013 Generic Molecule IMS Value 000's Citalopram 116 706 Rosuvastatin 56 442 Valsartan 56 101 Valsartan+HCTZ 55 284 Escitalopram (Launched) 45 076 Memantine 24 423 Topiramate 19 331 Gabapentin 15 409 Metformin 13 500 Pioglitazone 3 865 Olanza
Slide 89: LATAM 2013 New Product Pipeline Venezuela
LATAM 2013 New Product Pipeline Venezuela Generic Molecule IMS Value 000's Clopidogrel Bisulphate (Launched) 93 760 Pantoprazole (Launched) 49 329 Valsartan+HCTZ 31 289 Metformin+Glibenclamide 30 167 Carvedilol 25 906 Tamsulosin 22 548 Glimepiride 20 352 Rosuvastatin (Launched) 14 610 Diclofenac Pot
Slide 90: Sub Saharan Africa Performance Review
Sub Saharan Africa Performance Review Relative Regional Growth Rates Sales R1 652m SSA (excluding South 27% French West Southern Africa Africa) Africa 21% 11% West East Africa Africa 38% 33% Anglo West Africa 35% Southern Africa 17% East Africa 14% ► Significant early entry rewards Margins increas
Slide 91: Sub Saharan Africa Performance Review
Sub Saharan Africa Performance Review ► Strong regional performance ► West Africa has been exceptional FWA – Political instability last year Nigeria – additional representation ⁻ Sales team in excess of 150 ► Southern Africa Effective sales and marketing ► East Africa Good growth despite tou
Slide 92: Sub Saharan Africa Performance Review
Sub Saharan Africa Performance Review ► Shelys Acquisition of remaining 40% from the minority shareholder Reaping benefits of private market growth strategy and clear direction ► Political unrest Factor across many markets ► Pipeline Strong organic pipeline 9 brands launched in SSA Collabo
Slide 93: Conclusion: Summary and Prospects
Conclusion Summary and Prospects ► Aspen enjoyed another strong year Stronger momentum in H2 All financial indicators positive ⁻ Increased dividend ⁻ Increased cash flows South Africa ► Expect H2 momentum to continue ► Underlying double digit growth in sales Volume growth in base Pipeline –
Slide 94: Conclusion: Summary and Prospects
Conclusion Summary and Prospects Australia ► Sigma bedded down ► Generic leader in Australia ► 1 in 6 scripts dispensed for an Aspen distributed product ► Strong sales growth to continue Base growth GSK classic brands Further opportunities and pipeline LATAM/Sub Saharan Africa/Asia ► Growing f
Slide 95: Conclusion: Rolling out the Global Strategy
Conclusion Summary and Prospects Rolling out the Global Strategy ► More products and more Aspen presence across the globe ► Increased Presence Increased representation across LATAM/Asia/Sub Saharan Africa Further representation considered across other geographies Acquisition of local platform
Aspen Pharmacare Holdings — FY2012 Earnings Presentation on 6ix