ASCENDIS HEALTH LIMITED - Trading statement for the six months ended 31 December 2019

Trading statement for the six months ended 31 December 2019

Ascendis Health Limited
(Registration number 2008/005856/06)
(Incorporated in the Republic of South Africa)
Share code: ASC
ISIN: ZAE000185005
(“Ascendis Health” or “the Company”)

Trading statement for the six months ended 31 December 2019

In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, companies are required to publish a trading
statement as soon as they are satisfied, with a reasonable degree of certainty, that the financial results for the period
to be reported upon next will differ by at least 20% from those of the previous corresponding reporting period.

As reported in the voluntary trading update published on SENS on 5 February 2020, the expected increase in revenue
relative to the prior period has been driven by higher sales in Europe due to new tender business secured by Remedica
and new product launches in Sun Wave Pharma. This was partly negated by increased market competition in Scitec
and lower licence fee revenue in Farmalider. In South Africa, revenue growth is due to the recovery from prior year
supply issues in Pharma, and new agency business in Medical Devices.

Growth in normalised earnings before interest, tax, depreciation and amortisation (normalised EBITDAPM) was driven
by higher gross profit as a result of higher revenue which was partially offset by increased provisions for legal fees in
Farmalider and increased investment in marketing in Europe and South Africa.

The group incurred extensive consulting and professional fees associated with the restructuring of the senior lender
debt, and other once-off costs related to the disposal of Biosciences and the planned disposal of Remedica as well as
a considerable increase in finance expenses associated with the interim stability agreements with the senior lenders.

An impairment loss of R24 million was recognised in respect of the Direct Selling business driven by the deterioration
of its trading results.

These additional costs and impairments have had an adverse effect on profit after tax compared to the prior period,
with the majority of earnings per share measures decreasing as indicated below.

The board of directors of Ascendis Health (“Board”) advises shareholders that it is reasonably certain that the interim
results for the period ended 31 December 2019, when compared with the published results for the interim period ended
31 December 2018, are expected to differ as follows:

                                      Six months        Six months       % change       Six months        % change
                                         ended             ended         Expected          ended          Expected
                                      31 Dec 2019       31 Dec 2018    ranges based     31 Dec 2018     ranges based
                                    Expected ranges      Restated(1)    on Restated      Reported        on Reported
     Revenue
     Group revenue – continuing        3 755 – 3 949           3 458        9% - 14%           3 955        (5%) – (0%)
     operations (R’m)

     Earnings per share
     Continuing operations
     Normalised headline                   156 - 182             188     (17%) – (3%)            351      (56%) – (48%)
     earningsPM (R’m)
     Basic earnings per share       20.1 – 23.4 cents     35.6 cents    (44%) – (34%)     45.8 cents      (56%) – (49%)
     (cents)
     Headline earnings per share    20.3 – 23.7 cents     31.4 cents    (35%) – (25%)     41.4 cents      (51%) – (43%)
     (cents)
     Normalised headline            32.2 – 37.5 cents     38.7 cents     (17%) – (3%)     72.5 cents      (56%) – (48%)
     earnings per sharePM (cents)

     Total operations
     Normalised headline                   167 - 194             224    (25%) – (13%)            335      (50%) – (42%)
     earningsPM (R’m)
     Basic earnings per share       41.6 – 48.4 cents     42.3 cents      (2%) – 14%      42.3 cents        (2%) – 14%
     (cents)
     Headline earnings per share    22.5 – 26.2 cents     37.9 cents    (41%) – (31%)     37.9 cents      (41%) – (31%)
     (cents)
     Normalised headline            34.3 – 40.0 cents     46.2 cents    (26%) – (13%)     69.0 cents      (50%) – (42%)
     earnings per sharePM
     (cents)(2)
   Notes on restatements:

    (1) The following additional businesses have been classified as discontinued operations, resulting in the
        restatement of the comparative information:
        - the Afrikelp, Efekto and Marltons businesses in the Biosciences division, with the sale completed on
           31 July 2019; and
        - the two remaining businesses in the Biosciences division, Avima and Klub M5, are being considered for
           divestment.
    (2) The accounting policy for normalised headline earnings per sharePM has been amended in the 2019 financial
        period resulting in the restatement of the reported comparative period, for the following:
        - now adding back costs incurred to restructure the debt and equity structure of the group;
        - now adding back settlement of product-related litigation;
        - no longer add back the amortisation of intangible assets that arise upon business combinations; and
        - no longer add back the operational profits or losses that will not form part of the future of the group that
           have not been recognised as a discontinued operation in terms of International Financial Reporting
           Standards (IFRS 5).

PM (Performance Measures): Shareholders are advised that normalised EBITDA, normalised headline earnings and
normalised headline earnings per share are not terms defined by International Financial Reporting Standards and may
accordingly differ from company to company. The Board however believes that normalised EBITDA, normalised
headline earnings and normalised headline earnings per share are relevant performance measures as it provides a
measure of sustainable earnings. The normalised EBITDA, normalised headline earnings and normalised headline
earnings per share figures have been calculated consistently with Ascendis Health’s methodology for the calculation
of normalised EBITDA, normalised headline earnings and normalised headline earnings per share as set out on the
Company’s website:

https://ascendishealth.com/wp-content/uploads/2020/02/Ascendis-Health-Performance-Measures-Jan-2020.pdf



The financial information on which this trading statement is based has not been reviewed or reported on by the
Company's external auditors.


5 March 2020
Bryanston

Sponsor
Questco Corporate Advisory Proprietary Limited

Date: 05-03-2020 03:10:00
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