2020 INTERIM RESULTS PRESENTATION For the six months ended 31 - - PowerPoint PPT Presentation

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2020 INTERIM RESULTS PRESENTATION For the six months ended 31 - - PowerPoint PPT Presentation

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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

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SLIDE 1

2020 INTERIM RESULTS PRESENTATION

For the six months ended 31 December 2019

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SLIDE 2

DISCLAIMER

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

  • f 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,

  • r 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

  • therwise. Any profit forecasts published in this report are unaudited and have not been reviewed or reported on by Aspen's external auditors.

2

CAUTIONARY REGARDING FORWARD-LOOKING STATEMENTS

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SLIDE 3

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

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SLIDE 4

FINANCIAL REVIEW

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SLIDE 5

FINANCIAL SUMMARY

5

CONTINUING

*CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates ^ Calculated in terms of Facilities Agreement covenant measure

R’millio illion % Change ge v vs PY H1 2020 1 2020 Reporte ted CER ER * 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% Net debt / / EBIT ITDA^ 3. 3.53x 53x

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SLIDE 6

SEGMENTAL (CER)

6

CONTINUING

55.8% 51.1% Regional Brands 54.0% 56.6% Group 59.1% 55.9% Sterile Focus Brands 26.6% 36.2% Manufacturing H1 2019 (CER) H1 2020

Gross profit percentage

4628 4627 H1 2019 (CER) H1 2020 8284 7834 3940 3975 H1 2020 H1 2019 (CER) 7120 6962

Regional Brands Sterile Focus Brands

842 1081 2984 3171 H1 2020 H1 2019 (CER)

Manufacturing

Gross profit Revenue

  • Improved gross profit percentage from Sterile Focus,

despite lower sales. Gross profit percentage is benefiting from a higher relative weighting of Anaesthetics

  • Regional Brands show revenue growth

notwithstanding declines in the oncology portfolio and previously reported Zantac recall. Gross profit flat

  • Revenue upside from recommencement of heparin

API sales, gross profit percentage aligned to FY 2019

  • Gross profit percentage reduced, but ahead of H2 2019

CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates

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SLIDE 7

GROSS MARGIN PERCENTAGE (CER)

7

CONTINUING

Manufacturing Group Regional Brands Sterile Focus Brands

51.1% H1 2019 52.2% 54.0% H2 2019 H1 2020 FY 2019 50.3% 55.9% FY 2019 59.1% H1 2019 56.5% H2 2019 H1 2020 57.8% 59.9% 56.5% H1 2019 55.8% H2 2019 H1 2020 FY 2019 56.6% 26.3% H2 2019 H1 2019 26.6% FY 2019 16.0% H1 2020 36.2%

CER reflects the underlying operational performance. H1 2019, H2 2019 and FY 2019 restated at H1 2020 average exchange rates

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SLIDE 8

NORMALISED EBITDA

Decline in gross profit percentage partially offset by well controlled operating expenses & upside in other operating income

8

CONTINUING

*CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates ** Gross profit is after deduction of depreciation

R'millio illion H1 2020 1 2020 % o

  • f r

reven enue H1 2019 ( 1 2019 (CER) ) * % o

  • f 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. 29.3% 3%

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SLIDE 9

CURRENCY IMPACT

  • 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)

CONTINUING

9

Aver erage FX e FX R Rates es to Z ZAR Contribution t to rev evenue Contribution t to Normalis lised ed EBITDA H1 2020 1 2020 FY 2019 2019 H1 2019 1 2019 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

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SLIDE 10

EFFECTIVE TAX RATES

10

CONTINUING

20% 15% 5% 10% 25% 30% 15.4% 16.6% 15.4% FY 2018^ 17.0% 15.3% H1 2019 Restated* 28.6% FY 2019 Restated* 18.1% 15.9% H1 2020* Group effective tax rate Group normalised effective tax rate

  • The Group’s effective tax rate spiked in FY 2019 due to higher

impairments in that year

  • Normalised effective tax rate eliminates the periodic spikes and other

non-trading items

  • Normalised effective tax rate in H1 2020 is 0,5% greater than FY 2019
  • Increase is slightly lower than anticipated due to

 A change in mix of contributions to total operating profit by Group

companies

 Benefits from the utilization of tax losses

  • No material change to the normalised effective tax rate is expected

for FY 2020

^ 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

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SLIDE 11

RECONCILIATION OF CER NHEPS

11

CONTINUING

*CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates

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. 594.2

  • 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. 706.8

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SLIDE 12

NHEPS BRIDGE (CER)

12

International - EUR 69% 23% South Africa - ZAR

142 Amortisation Normalised HEPS (CER)

  • 31 December 2018
  • 28

Normalised EBITDA

  • 72

Depreciation

  • 40

Finance costs Normalised HEPS (Reported)

  • 31 December 2019

3 226 3 227

CONTINUING R’MILLION

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

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SLIDE 13

WORKING CAPITAL

  • Working capital as a % of revenue ratio unfavourably

impacted by the Japan disposal

  • Increased inventory as a result of

 Improved Anaesthetics stock levels  Recovery of inventory after strike at SA production sites

  • Unwind of residual Nutritionals debtors and creditors
  • Settlement of pricing investigation commitments
  • Working capital is generally cyclically higher in December as

compared to June

13

CONTINUING

265 635 481 FY 2019 (comparable base) Inventories

  • 647

Trade debtors Trade creditors Other debtors/creditors H1 2020 16 440 17 174

Net Working Capital – R’million

*CER reflects the underlying operational performance. FY 2019 and H1 2019 restated at H1 2020 average exchange rates

R’millio illion H1 2020 1 2020 H1 2019 ( 1 2019 (CER) ) * FY 2019 ( 2019 (CER) ) * Net Working capital - comparable base 17 174 18 229 16 440 Net Working capital - excluding Oss 12 255 13 282 11 727 Working capital % of revenue 47% 51% 46% Less: Attributable to Oss

  • 9%
  • 9%
  • 9%

Working capital excluding Oss - % of revenue 38% 42% 37%

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SLIDE 14

CAPITAL EXPENDITURE

14

PPE CAPEX IN R’MILLION

  • Expected first commercial production from strategic projects

 Port Elizabeth FY 2021  Bad Oldesloe FY 2021  Notre Dame de Bondeville FY 2023

  • Substantive commercial benefits expected in FY 2024

H2 2019 1 800

FY 2020 FY 2018 FY 2019 FY 2021 2 145 FY 2022 2 442 1 500 1 200 Actual Planned

  • Planned capex is based on current expectations that no new

strategic capex programmes will be undertaken in the next 3 years

  • Maintenance capex generally between R400-500 million p.a.

H2 202 2 2020 1 588 1 588 H1 202 2020 1 012

2 600

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SLIDE 15

BORROWINGS

  • EUR term debt of EUR 365 million (R5.7 billion) due 1 July 2020

 Proceeds from Japan business of EUR 271 million have been

applied to balance due

 Remaining balance to be settled from operating cash flows

  • Net Debt/EBITDA* covenant is 4.0x for the twelve months ending

31 December 2019 and 3.5x for the twelve months ending 30 June 2020

15

ANALYSIS OF NET BORROWINGS

International - EUR 69% South Africa - ZAR 23%

^ excluding foreign exchange impact * Calculated in terms of Facilities Agreement covenant measure ** Excluding amortisation of capital raising fees, and inclusive of continuing and discontinued operations

# Pro-forma net debt assumes the proceeds from the divestment of the Japanese business have been applied to borrowings

5728 6300 2162 22721 1-Jul-20 1-Jul-22 31183 ZAR EUR AUD

Syndicated term and revolving loans R’m

R'millio illion u n unle less s stated o d othe herwis wise H1 2020 1 2020 pro ro-forma # H1 2020 1 2020 H1 2019 1 2019 Net normalised funding costs ^ ( 688) ( 688) ( 853) Gearing (%) 37% 40% 51% Net Debt/EBITDA (x) * 3,3x 3.5x 4.4x Interest cover ratio (x) * 5.1x 5.3x 5.4x Effective interest rate for the period (%)** 3.70% 3.70% 3.59% Cash (5 953) (5 953) (9 868) Non-current borrowings 31 470 31 470 52 506 Current borrowings 7 876 12 414 10 869 Net borrowings 33 393 37 931 53 507

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SLIDE 16

NET BORROWINGS BRIDGE

16

69% International - EUR 23% South Africa - ZAR

638 274 39 013 Capex (IP and PPE) Net borrowings as at 30 June 2019 FX impact IFRS 16 lease liabilities Net Borrowings at 31 December 2019 5 38 984 1 292 Cashflows from

  • perating activities
  • 2 595

Transaction related Net borrowings as at 30 June 2019 (rebased) 37 989

  • 609

Other

Operations related R1 298 million

R’MILLION

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SLIDE 17

KEY CASH FLOW COMMITMENT TRENDS

  • All future commitments are indicative and based upon management's current expectations
  • Such future commitments are subject to change as circumstances evolve

17

^ Relates to transaction-related payments and/or receipts which may arise contingent upon future events

R'millio illion FY 2018 2018 FY 2019 2019 H1 2020 H2 2020 FY 2020 2020 Future e trend / / Commen ents Capital expenditure - PPE 2 145 2 442 1 012 1 588 2 600 Declining sharply after FY 2020 and then stabalising - refer to slide 14 Capital expenditure - Intangible 6 083 1 522 280 541 821 Opportunity dependent Dividends 1 313 1 437

  • Dividend assessed annually by Board

Deferred payments 4 599 5 644 272 9 281 Trending lower but dependent on future transactions Pricing investigations 81

  • 228

119 347 Dependent on developments with European Commission Deferred receipts

  • (121)

(5 031) (5 152) Proceeds of Japanese disposal and other smaller transactions due in H2 2020 Conditional future payment/receipts ^

  • 312
  • 312

Net contingent payments of R160 million between FY 2021 and FY 2022 Maturing EUR term debt

  • EUR 365 million balance of term loan due 1 July 2020
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SLIDE 18

GROUP STRATEGY AND PERFORMANCE REVIEW

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SLIDE 19

SIGNIFICANT PROGRESS ON OUR MEDIUM-TERM PRIORITIES

  • Increase fo

focus

 Focus on our pharmaceutical businesses and continuing to build on areas of competitive advantage  Seeking partnering opportunities in markets where we are sub-scale

  • Build

ld on o

  • ur s

strengths

 Continue development of our complex manufacturing facilities  Review and refine product portfolio via acquisitions and disposals

  • Organic g

c growth

 Drive Commercial performance and control costs  Commercial intervention in Europe CIS underway

  • Medium-ter

term n net d debt/EBITDA ta target l et less t than 3 3.0x

 Pro-forma* net debt/EBITDA 3.3x

19

*Pro-forma net debt assumes the proceeds of R4.5 billion from the divestment of the Japanese Business has been applied to borrowings

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SLIDE 20

GROUP REVENUE

  • Commercial pharma +2%

 Regional Brands +6%, widespread growth across regions  Sterile Focus Brands -2%, Anaesthetics +4%, offset by Thrombosis -8%  Thrombosis performance in Europe CIS, offset by heparin API sales

  • Manufacturing +6%, resumption of heparin API sales

20

CONTINUING

All commentary in y/y CER growth, unless stated otherwise *CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates

R’millio illion H1 2020 1 2020 H1 2019 1 2019 % ch change H1 2019 ( 1 2019 (CER) * * % ch change Comme mmercial Pharma 15 246 15 246 14 892 14 892 2% 2% 14 953 14 953 2% 2% Regional Brands 8 284 7 812 6% 7 833 6% Sterile Focus Brands 6 962 7 080

  • 2%

7 120

  • 2%

Ma Manuf nufactur uring ing 3 171 3 171 2 986 2 986 6% 6% 2 984 2 984 6% 6% API 2 543 2 292 11% 2 290 11% FDF 628 694

  • 10%

694

  • 10%

Group r reven enue 18 417 18 417 17 878 17 878 3% 3% 17 937 17 937 3% 3%

Developed markets

  • 1% CER growth

Emerging markets +4% CER growth R9.1bn 60% R6.1bn 40%

Market split Commercial Pharma R15.2bn

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SLIDE 21

GROUP REVENUE – BY REGION

  • Commercial Pharma +2%

 Aspen regions (excluding Europe CIS) +6%  Europe CIS -6%

  • Manufacturing +6%

 Benefit from heparin sales  Underlying operations in line with expectations

21

CONTINUING – Focused effort in delivering organic growth and controlling costs

All commentary in y/y CER growth, unless stated otherwise *CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates ** Developed Europe and Developing Europe & CIS ^ Latin America ,USA and Canada ƚ SSA and MENA

R'millio illion H1 2020 1 2020 H1 2019 ( 1 2019 (CER)* % ch change Comme mmercial Pharma 15 246 15 246 14 953 14 953 2% 2% Asia Pacific 4 320 4 086 6% 6% Africa & Middle East ƚ 4 151 3 915 6% 6% Americas ^ 2 009 1 888 6% 6% Europe CIS ** 4 766 5 064

  • 6%

6% Ma Manuf nufactur uring ing 3 171 3 171 2 986 2 986 6% 6% To Total 18 417 18 417 17 939 17 939 3% 3%

Aspen regions (excluding Europe CIS) +6% CER growth Europe CIS

  • 6% CER growth

Geographic split Commercial Pharma R15.2bn

Aspen regions (excl. Europe CIS) 69% Europe CIS 31%

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SLIDE 22

Sterile Focus Brands R3.3bn

COMMERCIAL PHARMA – ASPEN REGIONS, EXCLUDING EUROPE CIS

  • Regio

gional l Brands + +6%, , approxim imately ly 70%

  • f s

sale les

 SSA approximately half of Regional Brands and grew +7%  Australasia +5%

  • Sterile F

Focus B Bran ands + +6%

 80% Anaesthetics  Asia Pacific +7%, driven by China +12%

  • Mome

mentum m to to continue i in H H2

 Africa & Middle East – sustained performance and SEP increase 4.53% in SA  Latin America – double digit growth projected

  • Asia

a Pacif ific ic – neg egative C e COVID-19 19 effe fect

 Zantac impact

22

CONTINUING – Improving performance

All commentary in y/y CER growth, unless stated otherwise *CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates ^Latin America, USA and Canada ƚ SSA and MENA

R'millio illion H1 2020 1 2020 H1 2019 ( 1 2019 (CER)* % ch change Regio ional B l Brand nds 7 186 7 186 6 792 6 792 6% 6% Asia Pacific 1 996 1 919 4% Africa & Middle East ƚ 3 866 3 667 5% Americas ^ 1 324 1 206 10% Ster erile ile Focus us brand nds 3 294 3 294 3 097 3 097 6% 6% Asia Pacific 2 324 2 167 7% Africa & Middle East ƚ 285 248 15% Americas ^ 685 682 0% To Total 10 480 10 480 9 889 9 889 6% 6%

Regional Brands R7.2bn

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SLIDE 23

COMMERCIAL PHARMA - EUROPE CIS

  • Sterile

ile Focus B Brands i impactin ing E Europe CIS p performance

 Green shoots for H2 2020, supported by Anaesthetics supply and Thrombosis commercial intervention

  • Regio

gional B l Brands +6% 6%

 Oncology -10%  Other brands +15%

23

CONTINUING – Commercial intervention underway

All commentary in y/y CER growth, unless stated otherwise *CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates

R'millio illion H1 2020 1 2020 H1 2019 ( 1 2019 (CER ER)* % ch change Regio ional B l Brand nds 1 099 1 099 1 041 1 041 6% 6% Ster erile ile Focus us Brand nds 3 668 3 668 4 023 4 023

  • 9%

9% Thrombosis 2 462 2 740

  • 10%

10% Anaesthetics 1 206 1 283

  • 6%

6% To Total 4 767 4 767 5 064 5 064

  • 6%

6%

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SLIDE 24

COMMERCIAL PHARMA – EUROPE CIS – STERILE FOCUS BRANDS

  • Anaes

aesthetics -6% 6%

 Increased sales support & improving supply

  • Positively impacted Q2

 Developed Europe is 90% of revenue

  • End of January 2020, flat vs 7 months to January 2019
  • Growth anticipated in H2

 Supply improvement to continue into H2  Better H2 anticipated vs prior year

24

CONTINUING – Commercial intervention and supply impacting positively, sustainable performance required

Thrombosis Europe CIS quarterly sales for H1 2020 (reported), in EUR’m Anaesthetics Europe CIS quarterly sales for H1 2020 (reported), in EUR’m

Q2 Q1 Q2 Q1 >20% 20% >20% 20%

  • Th

Thrombosi sis s -10% 10%

 Benefits of commercial restructure are now impacting

  • Q2 a better reflection of the level of sales achievable in H2

 Margin pressure in heparin-based products

  • COGS increase
  • CEE particularly impacted

 Aspen sales weighted to heparin-based products

  • Higher margin from non heparin-based products

 H2 to claw back most of H1 underperformance All commentary in y/y CER growth, unless stated otherwise

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SLIDE 25

MANUFACTURING – API & FDF

  • API +

+11% 11%

 Driven by heparin sales to third parties in H1 2020

  • Benefit of heparin stockpile

 License agreement for nadroparin in Italy renegotiated

  • Italfarmaco to sell FDF in Italy
  • Aspen to supply nadroparin API only
  • To be reclassified to Manufacturing at FY 2020

 Better H2 performance anticipated vs H1. Further heparin API sales expected. Non-heparin sales also expected to increase

  • FD

FDF F -11% 11%

 Impacted by SAP cutover in Australian facility, no impact to patients  Stronger performance expected in H2  Anticipate positive growth for FY 2020

25

CONTINUING – Delivering efficiencies

All commentary in y/y CER growth, unless stated otherwise * CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates

API 80% FDF 20%

Manufacturing R3.2bn

R’millio illion H1 2020 1 2020 H1 2019 ( 1 2019 (CER) * * % ch change API 2 543 2 290 11% FDF 628 694

  • 10%

To Total 3 171 3 171 2 984 2 984 6% 6%

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SLIDE 26

OUTCOME FROM THE GROUP STRATEGIC REVIEW

  • Heightened focus driving momentum across the two portfolios

 Aspen – branded portfolio  Ethicare – commoditised/traded portfolio

  • Aspen private sector +11%
  • Aspen public sector +2%
  • Ethicare private sector -1%

 +7% Ethicare private sector (excluding ARVs)

  • Private sector ARVs > 20% decline
  • Ethicare public sector +10%
  • Public sector SA contributes < 15% of SA revenue

26

SA – Aspen and Ethicare

All commentary in y/y CER growth, unless stated otherwise

  • Aspen maintains a social commitment towards our South African

patients

  • Transaction with Laurus completed (subject to conditions

precedent)

 Patients gain access to competitively priced, quality products  Aspen will convert and distribute  Derisked from exchange rate risk and working capital investments  Supplementary tender adjudication imminent

Partnership across public sector ARVs

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SLIDE 27

OUTCOME FROM THE GROUP STRATEGIC REVIEW

  • Aspen has performed in this market

 Faced unilateral price decreases annually

  • Critical to have a pipeline to offset pricing pressure
  • Aspen’s hospital platform - good fit for Sandoz biosimilars

 Opportunities for Aspen Japan employees

  • R4.5 billion received February 2020

 Milestones for licenses, COGS, supply

  • EUR 50 million for 3 years uninterrupted supply

27

Divestment of Japanese Business

All commentary in y/y CER growth, unless stated otherwise

  • Restructuring of Europe CIS is progressing

 Some benefits already visible in Q2 performance  Initiatives to address Europe CIS performance continues  Aspen needs to sustain revenue at higher level

  • Running a structured process to identify potential partners

 Optimal partnership:

  • Regional commercial capabilities
  • Has a strategic commitment to the therapeutic area
  • Recognises Aspen’s manufacturing competencies

 Process is competitive

  • The final outcomes of the strategic review, will determine the most

appropriate course of action

 Expected by September 2020

EU Strategic review

slide-28
SLIDE 28
  • Commer

ercial P Pharma r reven enue e H2 > H1

 Growth in Regional and Sterile Brands  Impetus from SA and Latam to be maintained  Europe CIS H2 improvement  COVID-19 effect – unquantifiable

  • Manufacturing r

revenue H2 > H1

 Improved API and FDF sales

  • Further

er HP HPC mile lestone p possib ible le

OUTLOOK – BASED ON BUSINESS AS USUAL (excluding COVID-19)

28

Potential for FY 2020 to outperform FY 2019

R20.1 bn R33.4 bn Net debt R1.4 bn R10.3 bn Normalised EBITDA R53.5 bn R11.7 bn

  • 38% in Net debt

31 Dec 2019 (pro-forma) 31 Dec 2018

  • 12% in Normalised

EBITDA CY 2018*

CY 2019^

**CER reflects the underlying operational performance. H1 2019 and FY 2019 restated at H1 2020 average exchange rates *Including discontinued operations disposed of Nutritionals, Asia Pacific non-core pharmaceuticals, Japanese business and SA public sector ARVS. ^Excluding all discontinued operations as at 31 December 2019 Pro-forma net debt assumes the proceeds of R4.5 billion from the divestment of the Japanese business have been applied to borrowings All commentary in y/y CER growth, unless stated otherwise

Cents FY 2019 ( 2019 (CER) FY 2020 2020 H1 706.8 707.0 H2 643.6 Higher vs prior year FY 1350.4 Higher vs prior year

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SLIDE 29

APPENDICES

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SLIDE 30

APPENDIX 1: ABRIDGED STATEMENT OF COMPREHENSIVE INCOME

30

CONTINUING AND DISCONTINUED

R’millio illion H1 2020 1 2020 H1 2019 1 2019 % ch change Net r reven enue e 19 993 19 993 21 597 21 597

  • 7%

7% Cost of sales (9 887) (10 460) Gross ss p profit 10 106 10 106 11 137 11 137

  • 9%

9% Gross profit margin 50.5% 51.6% Operating expenses (5 144) (5 612) Net other operating expenses ( 950) ( 891) Depreciation 456 489 Amortisation 299 323 EBIT ITDA 4 767 4 767 5 446 5 446

  • 12%

12% EBITDA margin 23.8% 25.2% Depreciation (456) (489) Amortisation (299) (323) Oper erating ing profit it 4 012 4 012 4 634 4 634

  • 13%

13% Net funding costs ( 731) (1 016) Profit before t tax 3 281 3 281 3 618 3 618

  • 9%

9% Tax ( 612) ( 681) Profit it after er t tax f from c continu inuing o ing oper peratio ions 2 669 2 669 2 937 2 937

  • 9%

9% Profit from discontinued operations ( 40)

  • Profit

it for t the y he yea ear 2 629 2 629 2 937 2 937

  • 10%

10% EP EPS ( (cents) s) 576. 576.0 643. 643.4

  • 10%

10% HE HEPS PS ( (cents ts) 689. 689.7 718. 718.7

  • 4%

4% NHE HEPS ( (cents ts) 759. 759.6 785. 785.6

  • 3%

3%

slide-31
SLIDE 31

APPENDIX 2: ABRIDGED STATEMENT OF NORMALISED COMPREHENSIVE INCOME

31

CONTINUING

*CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates

R’millio illion H1 2020 1 2020 H1 2019 1 2019 % ch change H1 2019 ( 1 2019 (CER)* % ch change Net r reven enue e 18 417 18 417 17 878 17 878 3% 3% 17 937 17 937 3% 3% Cost of sales (9 007) (8 209) 10% (8 255) Gross ss p profit 9 410 9 410 9 669 9 669

  • 3%

3% 9 682 9 682

  • 3%

3% Gross profit margin 51.1% 54.1% 54.0% Operating expenses (4 821) (4 806)

  • (4 800)

Net other operating income 220 15 >100% 15 Depreciation 451 363 24% 363 EBIT ITDA 5 260 5 260 5 241 5 241

  • 5 260

5 260 0% 0% EBITDA margin 28.6% 29.3% 29.3% Depreciation (451) (363) 24% (363) Amortisation (285) (236) 21% (235) Oper erating p ing profit it 4 524 4 524 4 642 4 642

  • 3%

3% 4 662 4 662

  • 3%

3% Net funding costs ( 687) ( 856)

  • 20%

( 850) Profit before t tax 3 837 3 837 3 786 3 786 1% 1% 3 812 3 812 1% 1% Tax ( 610) ( 580) 5% ( 586) Profit it after er t tax f from c continu inuing o ing oper peratio ions 3 227 3 227 3 206 3 206 1% 1% 3 226 3 226 0% 0% NHEPS (cents) 707.0 702.4 1% 707 0% 0% Normalis lised ed ef effec ective t e tax r rate 15. 15.9% 9% 15. 15.3% 3% 15. 15.4% 4%

slide-32
SLIDE 32

APPENDIX 3: RECONCILIATION OF REPORTED NHEPS

32

CONTINUING AND DISCONTINUED

Cents H1 2020 1 2020 H1 2019 1 2019 % ch change Basic ic e earnin nings gs p per er s share e (EPS) 576. 576.0 643. 643.4

  • 10%

10% Impairment of property, plant and equipment 1.5 1.5 1% Impairment of intangible assets 106.6 46.0 >100% Loss on sale of discontinued operations 8.7

  • >100%

Loss on sale of assets classified as held-for-sale ( 4.3)

  • >100%

Loss on sale of tangible/intangible assets 1.2 27.8

  • 96%

Headlin dline e earnin nings gs p per er s share ( e (HEPS) 689. 689.7 718. 718.7

  • 4%

4% Restructuring costs 29.4 11.9 >100% Transactions costs 38.3 47.9

  • 20%

Product litigation costs 9.4 7.1 32% Foreign exchange gain relating to acquisition ( 7.2)

  • >100%

Normalis lised ed HEPS 759. 759.6 785. 785.6

  • 3%

3%

slide-33
SLIDE 33

APPENDIX 4: GROUP STATEMENT OF FINANCIAL POSITION

33

CONTINUING

R'million H1 2020 1 2020 H1 2019 1 2019 FY 2019 2019 TOTAL A ASSET ETS Non

  • n-current a

asse ssets 79 745 79 745 89 475 89 475 86 164 86 164 Intangible assets 60 153 70 297 66 468 Property, plant and equipment 12 612 11 692 12 065 Right-of-use assets 539

  • Goodwill

4 562 4 976 4 649 Deferred tax assets 1 161 1 029 1 163 Contingent environmental indemnification assets 242 824 801 Other non-current assets 476 657 1 018 Cu Current a asse ssets 37 965 37 965 45 346 45 346 36 152 36 152 Inventories 14 353 15 575 14 648 Receivables and other current assets 11 965 13 343 12 511 Cash and cash equivalents 5 953 9 868 8 977 Assets classified as held-for-sale 5 694 6 560 16 Total a asse ssets 117 710 117 710 134 821 134 821 122 316 122 316 R‘million H1 2020 1 2020 H1 2019 1 2019 FY 2019 2019 EQU QUITY A AND ND LIABIL ILIIT IITIE IES Shareholders e equ quity 55 962 55 962 52 290 52 290 54 213 54 213 Non

  • n-current l

liabilities 39 039 39 039 60 370 60 370 48 064 48 064 Borrowings 31 470 52 506 39 713 Other non-current liabilities 3 762 2 860 3 702 Unfavourable and onerous contracts 874 1 252 1 055 Deferred tax liabilities 1 938 2 259 2 049 Contingent environmental liabilities 242 824 801 Retirement and other employee benefits 753 669 744 Cu Current l liabilities 22 709 22 709 22 161 22 161 20 039 20 039 Borrowings 12 414 10 869 8 248 Trade and other payables 7 961 9 343 9 555 Other current liabilities 1 083 1 538 1 911 Unfavourable and onerous contracts 318 359 325 Liabilities classified as held-for-sale 933 52

  • Total e

equity a and l liabilities 117 710 117 710 134 821 134 821 122 316 122 316

slide-34
SLIDE 34

APPENDIX 5: EXTRACT FROM GROUP STATEMENT OF CASH FLOWS

  • Operating cash conversion rate (continuing) = operating cash flow per share (continuing) / HEPS (continuing)
  • Operating cash conversion rate (continuing) = 556,0 / 638,0 = 87%

CONTINUING AND DISCONTINUED

34

R'millio illion H1 2020 1 2020 H1 2019 1 2019 % ch change Cash operating profit 5 577 5 852

  • 5%

Changes in working capital (1 217) (2 253) Cash generated from operations 4 360 3 599 21% Net finance costs paid ( 889) ( 765) Tax paid ( 876) (1 123) Cash generated from operating activities 2 595 1 711 52% Operating ca cash f flow per s share ( (ce cents) 568. 568.5 374. 374.8 52% 52% Continuing 556. 556.0 273. 273.2 104% 104% Discontinued 12. 12.5 5 101. 101.6

slide-35
SLIDE 35

APPENDIX 6: NET FUNDING COSTS

35

CONTINUING

Cumulative change in margin applicable to the Group's syndicated term and revolving loans for changes in leverage ratio:

R’millio illion H1 2020 1 2020 H1 2019 1 2019 Net interest paid ( 591) ( 639) Foreign exchange (losses)/gains ( 10) ( 40) Notional interest on financial instruments ( 86) ( 177) Normalis lised ed n net et f fund nding ing c costs ( 687) 687) ( 856) 856) Debt raising fees on acquisitions ( 21) ( 44) Foreign exchange gains on acquisitions 33 Repo ported n d net f financ ncin ing c costs ( 675) 675) ( 900) 900) >4,50x but <4,75x +0,750% >4,25x but <4,50x +0,525% >4,00x but <4,25x +0,325% >3,75x but <4,00x +0,150% >3,50x but <3,75x >3,00x but <3,50x

  • 0,150%

>2,50x but <3,00x

  • 0,250%

>2,00x but <2,50x

  • 0,350%

<2,00x

  • 0,450%
slide-36
SLIDE 36

APPENDIX 7: GROUP REVENUE BY REGION

36

CONTINUING

* H1 2019 figures restated for discontinued operations **CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates

R’millio illion H1 2020 1 2020 H1 2019* 1 2019* % C Change ge H1 2019 ( 1 2019 (CER)** % C Change ge Developed Europe 6 261 6 210 1% 6 200 1% Sub-Saharan Africa 3 904 3 635 7% 3 642 7% Asia Pacific 4 543 4 357 4% 4 353 4% Latin America 1 694 1 551 9% 1 566 8% Developing Europe and CIS 1 157 1 283

  • 10%

1 300

  • 11%

MENA 543 529 3% 554

  • 2%

USA & Canada 315 313 1% 322

  • 2%

To Total 18 417 18 417 17 878 17 878 3% 3% 17 937 17 937 3% 3%

slide-37
SLIDE 37

APPENDIX 8: COMMERCIAL PHARMA REVENUE SEGMENT

37

CONTINUING – PREVIOUS DISCLOSURE

* H1 2019 figures restated for discontinued operations **CER reflects the underlying operational performance. H1 2019 restated at H1 2020 average exchange rates

R’millio illion H1 2020 1 2020 H1 2019* 1 2019* % ch change H1 2019 ( 1 2019 (CER)** % ch change Regio ional B l Brand nds 8 284 8 284 7 811 7 811 6% 6% 7 834 7 834 6% 6% Regional Brands 6 346 5 955 7% 5 953 7% High Potency & Cytotoxics 1 938 1 856 4% 1 881 3% Ster erile ile Focus us Brand nds 6 962 6 962 7 081 7 081

  • 2%

2% 7 120 7 120

  • 2%

2% Anaesthetics 3 860 3 705 4% 3 730 3% Thrombosis 3 102 3 376

  • 8%

3 390

  • 8%

Total R l Rev evenue ue 15 246 15 246 14 892 14 892 2% 2% 14 954 14 954 2% 2%

slide-38
SLIDE 38

APPENDIX 9: IFRS RESTATEMENTS

38

  • Adoption of new IFRS 16 Leases

 Retrospectively applied from 1 July 2019,

using a modified retrospective approach

 Comparatives are not restated under this

approach

IAS 17 17 IFRS RS 1 16 Statemen ent o

  • f compreh

ehen ensive i e inco come Operating lease expense 86

  • Interest paid-leases
  • 16

Depreciation

  • 78

Statem ement of financia ial p l posit itio ion Non

  • n-current

nt a assets Right of use assets

  • 539

Non

  • n-current l

liabiit iitie ies Non-current borrowings

  • 385

Current l liabilit ilitie ies Current borrowings

  • 162

Total b l borrowin wings gs 547 547

slide-39
SLIDE 39

APPENDIX 10: PORTFOLIO MANAGEMENT MODEL

39

Acquir ire Devel elop Collab aborat ate Proactively seek value enhancement

  • pportunities

Complimentary to existing

  • perations

Leverage intellectual & manufacturing advantage Product development lifecycle management Strategic relationships with MNCs

Aspen P Portf tfolio Balance between focus & diversification across regions and therapies Leading Global & Regional Brands Off patent, niche specialty brands Build ild p por

  • rtfolio

lio

Revitalis lise Collab aborat ate Divest st Evaluate

  • pportunity to

extract further value e.g. line extensions, new regional launches Seek partnerships that will unlock further value Check alignment to Portfolio Strategy & divest non-core assets

Reshap ape p portfol

  • lio

Generate s sustainable c cash f flows Realis alisatio ion o

  • f p

proc

  • ceeds f

from s sale ale o

  • f assets

Avail ilable le C Cap apit ital l

Sales es & & Marketin ing Manufacturin ing Supply ly Cha Chain

Maxim imis ise p por

  • rtfolio

lio returns

Leverage sales and distribution network Achieve manufacturing synergies Optimise supply chain Integrate acquisitions into existing business

Driv ivers o

  • f p

portfoli

  • lio
  • stra

rategy Patients Needs Market Conditions Group Capability Return on Investment Expectations