Aspen revenue exceeds R40 billion with accelerated medium-term growth anticipated

Johannesburg - JSE-listed Aspen Pharmacare Holdings Limited (APN), a global multinational specialty pharmaceutical company, has reported a strong performance for the year ended 30 June 2023.

SALIENT HIGHLIGHTS

• Revenue grew by 5% (-3% in constant exchange rate ("CER")) to R40 709 million (FY2022: R38 606)
• Normalised EBITDA rose by 1% (-6% in CER) to R11 100 million (FY2022: R11 012 million)
• Normalised headline earnings per share declined by -8% (-15% in CER) to 1 498,5 cents (FY2022: 1 627,6 cents)
• Headline earnings per share decreased by -4% (-11% in CER) to 1 405,4 cents (FY2022: 1 461,2 cents)
• Earnings per share decreased by -18% (-23% in CER) to 1 176,9 cents (FY2022: 1 432,3 cents)
• Dividend declared to shareholders increased by 5% to 342 cents per ordinary share (FY2022: 326,0 cents)
• Aspen has concluded three sterile manufacturing agreements at is French manufacturing facility and progressed a further agreement at the Gqeberha facility to an advanced technical stage subtantially progressing its medium-term strategy to fill its sterile manufacturing capacity
• An agreement was concluded with Eli Lilly and Company ("Lilly") to distribute and promote products in Sub-Saharan Africa, subject to conditions precedent and competition authority approvals
• Aspen celebrates 25 years as a JSE-listed pharmaceutical company

Stephen Saad, Aspen Group Chief Executive said, "We are pleased to announce solid results for the year with record revenue and normalised EBITDA delivered in H2 2023. Pleasing reported revenue growth was achieved by Commercial Pharmaceuticals and Manufacturing of 6% and 3% respectively, despite the volatile global trading environment."

"We have achieved outstanding progress in our endeavours to secure addition manufacturing volumes for our newly installed expanded sterile production capacities. We are tracking well to achieve our previous guidance of related contributions of R2 billion in calendar year 2024, increasing to R4 billion in calendar year 2025."

"These new long-term collaborative opportunities in Manufacturing, together with the Serum agreement, concluded in 2022, will provide substantial support to our medium-term strategy to fill our sterile manufacturing capacity. This in turn presents a potential annual contribution of at least R8 billion per annum."

"In addition, the product distribution agreement announced with Lilly ealier today, together with the recent Amgen and Viatris announcements, will provide growth momentum in our Commercial Pharmaceuticals segment. "

"We continue to actively explore additional contract manufacturing opportunities as well as further product portfolio enhancements to further drive growth into the future."

STERILE MANUFACTURING AGREEMENTS SECURED

Aspen is pleased to announce that it has now secured three sterile manufacturing agreements with multinational pharma companies for production at its French manufacturing facility. These new long-term opportunitiestogether with the Serum agreement , concluded in 2022, will materially contribute to the foundation of Aspen's medium-term strategy to fill its sterile manufacturing capacity. Additional agreements are under negotiation including one agreement for the Gqeberha facility already progressed to an advanced technical transfer stage.

COMMERCIAL PHARMACEUTICALS MAKES ADVANCES IN ITS PORTFOLIO ENHANCEMENT STRATEGY

Aspen has concluded an agreement with Eli Lilly Export S.A. a subsidiary of Eli Lilly and Company (Lilly), in terms of which Aspen will distribute and promote Lilly's products in Sub-Saharan Africa for an initial term of 10 years, automatically renewable for two further periods of 5 years ("the Transaction"). The sales revenue of the Lilly portfolio in Sub-Saharan Africa was approximately ZAR 440 million^[1] in 2022. This is expected to be materially increased by the launch of key Lilly pipeline products in the short to medium term. The pipeline includes Lilly's Tirzepatide, marketed globally as Mounjaro®, a molecule currently under evaluation by SAPHRA and expected to be launched in South Africa in the near future. The Transaction is conditional upon the fulfilment of customary conditions precedent applicable to transactions of this nature, including competition authority approvals. It is anticipated that the Transaction will complete by the end of Q1 of calendar 2024.

The recently announced agreement for the acquisition of a portfolio of products from Viatris is an exciting and significant step forward in building on and expanding our footprint in Latin America. The annualised revenue for the product portfolio is USD92 million and includes well-known brands such as Viagra, Lipitor, Zyloft, Norvasc, Lyrica, and Celebrex. This transaction will enable Latin America to become a greater contributor to Regional Brands going forward.

These transactions, together with the recently announced transaction securing distribution rights for Amgen products in Southern Africa, will enhance the Commercial Pharmaceuticals product portfolio in emerging markets and aligns with the previous guidance of adding incremental annualised revenue upwards of USD100 million in Latin America and South Africa.

GROUP FINANCIAL RESULTS HIGHLIGHTS

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