Wrap Text
Interim Results for the six months ended 31 December 2016
Ascendis Health Limited
(Incorporated in the Republic of South Africa)
Registration number 2008/005856/06
JSE share code ASC
ISIN ZAE000185005
("Ascendis" or "the group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2016
Key highlights
Revenue
UP 66%
R3.1 billion
Normalised EBITDA
UP 89%
R541 million
EBITDA
margin
UP 210 bps
17.4%
Normalised HEPS
UP 34%
74.9 cents per share
Interim dividend
UP 16%
11 cents per share
Cash from
operating activities
UP 57%
R406 million
43%
of revenue now
generated in hard
currencies outside
of South Africa
Successful integration
of international
acquisitions of
Remedica and Scitec
Commentary
Group profile and strategy
Ascendis Health is a health and care brands group operating in South Africa, the rest of Africa and
increasingly in international markets. The business owns a portfolio of market-leading brands for
people, plants and animals which are housed across three divisions:
- Consumer Brands(nutraceuticals,complementary medicines, derma-cosmeceuticals and sports nutrition)
- Pharma-Med (prescription and over-the-counter drugs, medical devices)
- Phyto-Vet (plant and animal health and care).
The group's strategy is to complement its organic growth in the domestic market through international
expansion, acquiring platform businesses in offshore markets and extracting synergies from these
acquisitions.
Early in the reporting period Ascendis finalised the transformative acquisitions of Remedica Holdings,
a generic pharmaceutical manufacturer in Cyprus, and Scitec International, a leading European sports
nutrition business, for EUR430 million. The acquisitions have created platforms to support international
growth and expansion while ensuring diversification across products, channels, geographies and
currencies. Approximately half of the group's sales will in future be generated in US Dollar and Euro,
providing a natural hedge against Rand volatility.
Financial performance
Group revenue for the six months increased by 66% to R3.1 billion (H1 2016: R1.9 billion), benefiting
from acquisitive growth of R940 million from Remedica and Scitec which were only consolidated for five
months of the period.
Foreign revenue increased by 270% to R1.3 billion, accounting for 43% (H1 2016: 20%) of the group's
total sales. This includes sales by the group's international businesses as well as exports from local
operations which were predominantly to other African countries and Europe. Products are currently
exported to 109 countries globally.
The group's gross margin at 42.6% (H1 2016: 43.5%) was impacted partially by currency fluctuations,
growth in the state hospital business in Medical Devices and by a change in product mix.
Earnings before interest, tax, depreciation and amortisation (EBITDA), normalised to exclude acquisition
and restructuring costs, grew by 89% to R541 million, with the normalised EBITDA margin increasing
by 210 basis points to 17.4% (H1 2016: 15.3%). Despite a slight reduction in the gross margin, the strong
growth in the EBITDA margin is evidence of the group's commitment to cost control, extracting
synergies and efficient and successful integration of newly acquired businesses.
Normalised operating profit increased by 77% to R442 million, with the operating margin strengthening
from 14.6% to 16.0%. Attributable normalised profit after tax grew by 70% to R231 million, after deducting
R25 million attributable to minority shareholders of Farmalider, the Spanish pharmaceutical business
acquired in 2015.
Headline earnings on a normalised basis increased by 105% to R310 million, with normalised HEPS 34%
higher at 74.9 cents per share. HEPS were 15% lower at 41.4 cents owing to the 46% increase in the
number of shares in issue over the period, mainly in relation to the rights issue and vendor placement
in August 2016 for the acquisitions of Remedica and Scitec.
Cash generated from operating activities increased by 57% to R406 million (H1 2016: R258 million).
Cash generated from financing activities amounted to R5.1 billion, this was achieved by raising debt and equity.
The capital raised was primarily applied to the acquisition of Remedica and Scitec.
The directors declared an interim dividend of 11.0 cents per share, an increase of 15.8% over the
prior period.
Divisional performance
Consumer Brands Pharma-Med Phyto-Vet
Revenue R968m R1 651m R491m
+102% +59% +38%
EBITDA R132m R374m R75m
+47% +103% +53%
EBITDA margin 13.6% 22.7% 15.2%
Consumer Brands revenue increased strongly due to the inclusion of Scitec Nutrition from August
onwards. Despite organic growth being impacted by the weakening consumer sentiment in South
Africa, the high end segment of the Wellness business unit showed double digit growth, driven by the
premium brand Solal. The professional skin care brand, Nimue, once again reported solid growth on a
constant currency basis.
Pharma-Med delivered excellent results with profit growth above expectations, despite the South
African generics business facing the challenge of imported inflation. Remedica was successfully
integrated and performed above target, contributing to the 490 basis points improvement in the
division's EBITDA margin.
Phyto-Vet showed good organic growth despite the negative impact of the drought in South Africa
until November, improving the EBITDA margin for the second consecutive year.
Acquisitions
The acquisitions of Remedica and Scitec were effective from 1 August 2016. Remedica was acquired
for EUR170 million in addition to a deferred payment of EUR90 million over three years and a further earn-out
linked to performance hurdles. Scitec was purchased for EUR150 million, plus a payment of EUR20 million
deferred for one year.
The two acquisitions were funded through a combination of new debt facilities of EUR180 million, a
rights offer of R1.2 billion, which was three times oversubscribed, and a vendor placement totalling
R1.5 billion.
Cyprus-based Remedica develops, produces and sells over 300 generic pharmaceutical products
primarily in emerging markets and has five manufacturing facilities, including a recently completed
world-class oncology facility. Remedica has a strong pipeline of specialty generic drugs, particularly
oncology and HIV, which are expected to be launched over the next three years.
Remedica generated revenue of R439 million (EUR29 million) in the five months since acquisition, with
profit after tax of R140 million (EUR9 million) being ahead of expectations. The integration
process has been successful and several synergy projects within the Pharma-Med division are ongoing.
As the third largest sports nutrition brand in Europe, Scitec provides a platform for international
expansion in the sports nutrition and wellness sectors while accelerating offshore opportunities for
the Ascendis Sports Nutrition brands Evox, Supashape and SSN. Scitec owns a modern manufacturing
plant in Hungary where the company produces close to 300 products for fitness, strength training
and well-being.
Scitec reported sales of R542 million (EUR35 milllion) from 1 August 2016 with profit after tax of
R42 million (EUR3 million). Integration and synergy projects covering cross-selling, production and research
and development are being implemented. Profitability is however below expectations owing to the increase in
whey protein costs globally over the period and the costs incurred in establishing customers in new geographic
territories.
The two new acquisitions, as well as Farmalider in Spain, generated high levels of free cash flow
due to the low corporate tax rates in their respective countries as well as tax incentives for research
and development. This resulted in the overall tax rate of Ascendis reducing from 27% to 14% in the
reporting period.
Post the reporting period, the group announced the acquisition of the southern African veterinary
operations of Cipla India for R375 million (including a deferred payment of R50 million). The
acquisitions of Cipla Vet (companion animal products) and Cipla Agrimed (commercial animal products), with
the combined profit after tax of R31 million for the year ended March 2016, are strategically aligned with
the Phyto-Vet division and will enable Ascendis to enter the attractive veterinary pharma market, with high
margin products in strong growth segments. There is also an opportunity to increase export sales from these
businesses and create synergies with Phyto-Vet's existing African network. The acquisition is subject to
competition approvals and the effective date is expected to be 1 April 2017.
A further announcement released on the 8th of March also relates to an acquisition of Sunwave Pharma SRL
("Sunwave") and NHP Natural Health Pharma Limited ("NHP Pharma") to be concluded post the reporting period.
The total consideration will range between EUR42 million and EUR65 million (including a maximum deferred
payment of EUR23 million), based on a profit after tax of EUR4 million for the year ended
December 2016. The acquisitions of Sunwave and NHP Pharma are inter-conditional and will be treated as a
single business combination in the hands of Ascendis which is expected to generate strong operating margins.
Together, Sunwave and NHP Pharma owns the various trademarks and IP associated with the products it distributes
including complementary and alternative medicines ("CAMS") and food supplement products in Romania. This
acquisition will provide an attractive platform for Ascendis' entry into the Romanian OTC market, which
aligns with Ascendis' stated strategy of focusing on the Central and Eastern European region ("CEE"), and
will furthermore provide access to a vast portfolio of complementary medicines and pipeline of new products.
The acquisition is subject to competition and regulatory approvals and the effective date is expected to be
30 April 2017.
Outlook
Synergy projects across the European acquisitions of Remedica, Farmalider and Scitec remain the
priority while the group is investing in the geographic diversification and new sales channels for Scitec
to improve profitability.
Potential acquisitions of platform and bolt-on businesses in South Africa, Europe and emerging markets are
currently being evaluated. Funds of approximately R750 million are available for acquisitions in the next
12 months without raising further equity.
Management aims to focus on creating production efficiencies across the pharma manufacturing
facilities in South Africa and Europe, launch several export initiatives from South Africa and enter new
high growth markets from its three European platform companies. New product development and
innovation will continue to be key to driving organic growth in the health and care markets locally and
internationally.
Dr Karsten Wellner Kieron Futter
Chief Executive Officer Chief Financial Officer
Johannesburg
8 March 2017
Unaudited condensed group statement of
financial position
at 31 December 2016
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 December 31 December 30 June
2016 2015 2016
R'000 R'000 R'000
Property, plant and equipment 1 022 594 257 015 365 464
Intangible assets and goodwill 7 674 272 2 506 053 3 008 180
Investments accounted for using the equity method 747 - 386
Other financial assets 51 053 2 662 73 287
Deferred income tax assets 18 403 19 930 10 651
Non-current assets 8 767 069 2 785 660 3 457 968
Inventories 1 407 801 762 218 939 823
Trade and other receivables 1 428 542 788 042 1 065 454
Other financial assets 66 028 120 012 22 281
Current tax receivable 60 423 - 30 561
Derivative financial assets 221 15 417 6 727
Cash and cash equivalents 562 670 140 404 198 905
Current assets 3 525 685 1 826 093 2 263 751
Total assets 12 292 754 4 611 753 5 721 719
Stated capital 5 479 404 1 591 512 2 138 684
Other reserves (867 004) (74 363) (259 892)
Retained earnings 468 697 348 757 396 949
Equity attributable to equity holders of parent 5 081 097 1 865 906 2 275 741
Non-controlling interest 103 853 140 075 179 302
Total equity 5 184 950 2 005 981 2 455 043
Borrowings and other financial liabilities 3 724 716 979 254 1 052 266
Deferred income tax liabilities 396 036 214 594 224 358
Deferred vendor liabilities 1 238 174 15 761 207 184
Derivative financial liability 27 668 2 933 45 801
Finance lease liabilities 2 987 - 3 932
Non-current liabilities 5 389 581 1 212 542 1 533 541
Trade and other payables 786 948 638 079 853 528
Derivative financial liability 11 893 7 169 -
Borrowings and other financial liabilities 270 992 371 950 376 631
Current tax payable 51 185 22 868 38 031
Deferred vendor liabilities 424 632 289 508 222 707
Provisions 15 128 - 17 493
Finance lease liabilities 2 079 - 3 444
Bank overdraft 155 366 63 656 221 301
Current liabilities 1 718 223 1 393 230 1 733 135
Total liabilities 7 107 804 2 605 772 3 266 676
Total equity and liabilities 12 292 754 4 611 753 5 721 719
Unaudited condensed group statement of
comprehensive income
for the six months ended 31 December 2016
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 December 31 December 30 June
2016 2015 2016
R'000 R'000 R'000
Revenue 3 110 275 1 870 500 3 918 432
Cost of sales (1 786 488) (1 056 621) (2 356 149)
Gross profit 1 323 787 813 879 1 562 283
Other income 55 510 8 600 85 872
Selling and distribution cost (269 412) (203 158) (326 659)
Administrative expenses (552 254) (304 029) (709 653)
Other operating expenses (173 813) (70 077) (235 313)
Operating profit 383 818 245 215 376 530
Finance income 22 690 13 256 32 968
Finance expense (164 207) (60 997) (163 477)
(Losses)/gains from equity accounted investments (1 136) - 5 625
Profit before taxation 241 165 197 474 251 646
Taxation (42 232) (50 103) (61 565)
Profit for the period 198 933 147 371 190 081
Other comprehensive income
Items that may be reclassified to profit and loss
Foreign currency translation reserve (295 313) 29 897 (54 125)
Effects of cash flow hedges (11 860) (1 496) (37 009)
Items that will not be reclassified to profit and loss
Revaluation of property, plant and equipment - - 19 060
Income tax relating to items that may be reclassified - - (5 337)
Other comprehensive (loss)/income for the period net
of tax (307 173) 28 401 (77 411)
Total comprehensive (loss)/income for the period (108 240) 175 772 112 670
Profit attributable to:
Owners of the parent 173 499 131 760 158 733
Non-controlling interest 25 434 15 611 31 348
198 933 147 371 190 081
Total comprehensive (loss)/income attributable to:
Owners of the parent (58 904) 157 046 69 403
Non-controlling interest (49 336) 18 726 43 267
(108 240) 175 772 112 670
Earnings
Basic and diluted earnings per share (cents) 41.93 48.75 57.13
Unaudited Condensed group Statement of
Changes in Equity
for the six months ended 31 December 2016
Total
Put option attributable
non- Accumulated to equity
Foreign controlling (loss)/ holders of Non
Stated translation Revaluation Hedging interest Total other retained the group/ controlling
capital reserve reserve reserve reserve reserves* income company interest Total equity
Balance as at 30 June 2015 1 576 730 188 976 (949) - (52 124) 299 417 1 824 238 - 1 824 238
Profit for the period - - - - - - 131 760 131 760 15 611 147 371
Other comprehensive income - 25 286 - 204 - - - 25 490 3 115 28 605
Total comprehensive income for the year - 25 286 - 204 - - 131 760 157 250 18 726 175 976
Purchase of own/treasury shares 14 782 - - - - - - 14 782 - 14 782
Dividends - - - - - - (30 296) (30 296) - (30 296)
Acquisition of a subsidiary - - - - - - - - 121 349 121 349
Put-option on non-controlling interest - - - - (99 865) - - (99 865) - (99 865)
Reclassification - - - - - 52 124 (52 124) - - -
Total contributions by and distributions to owners of
the company recognised directly in equity 14 782 - - - (99 865) 52 124 (82 420) (115 379) 121 349 5 970
Balance as at 31 December 2016 1 591 512 25 474 976 (745) (99 865) - 348 757 1 866 109 140 075 2 006 184
Profit for the period - - - - - - 26 973 26 973 15 737 42 710
Other comprehensive income - (79 411) 13 723 (37 213) - - - (102 901) 8 804 (94 097)
Total comprehensive income for the year - (79 411) 13 723 (37 213) - - 26 973 (75 928) 24 541 (51 387)
Issue of ordinary shares 557 890 - - - - - - 557 890 - 557 890
Raising fees capitalised (658) - - - - - - (658) - (658)
Purchase of own/treasury shares (10 060) - - - - - - (10 060) - (10 060)
Dividends - - - - - - (26 770) (26 770) - (26 770)
Acquisition of a subsidiary - - - - - - - - (20 204) (20 204)
Put-option on non-controlling interest - - - - 48 - - 48 - 48
Foreign currency translation reserve - (37 845) - - (17 927) 17 167 - (38 605) 38 605 -
Statutory reserve: Farmalider allocation to reserve - - - - - 7 850 (4 135) 3 715 (3 715) -
Reclassification - - - - - (52 124) 52 124 - - -
Total contributions by and distributions to owners of
the company recognised directly in equity 547 172 (37 845) - - (17 879) (27 107) 21 219 485 560 14 686 500 246
Balance as at 30 June 2016 2 138 684 (91 782) 14 699 (37 958) (117 744) (27 107) 396 949 2 275 741 179 302 2 455 043
Profit for the period - - - - - - 173 499 173 499 25 434 198 933
Other comprehensive income - (220 543) - 26 098 - - (37 958) (232 403) (74 770) (307 173)
Total comprehensive income for the year - (220 543) - 26 098 - - 135 541 (58 904) (49 336) (108 240)
Issue of ordinary shares 3 446 239 - - - - (450 114) - 2 996 125 - 2 996 125
Raising fees capitalised (41 717) - - - - - - (41 717) - (41 717)
Purchase of own/treasury shares (63 802) - - - - - - (63 802) - (63 802)
Dividends - - - - - - (52 459) (52 459) - (52 459)
Foreign currency translation reserve - 2 873 - - 14 512 (3 068) - 14 317 (14 317) -
Statutory reserve: Farmalider allocation to reserve - - - - - 23 130 (11 334) 11 796 (11 796) -
Total contributions by and distributions to owners of
the company recognised directly in equity 3 340 720 2 873 - - 14 512 (430 052) (63 793) 2 864 260 (26 113) 2 838 147
Balance as at 31 December 2016 5 479 404 (309 452) 14 699 (11 860) (103 232) (457 159) 468 697 5 081 097 103 853 5 184 950
* Other reserves include a Share-based payment reserve (R 13,3 million) that has remained unchanged during the 2016 and 2017 financial period. Also included in this reserve is a Farmalider statutory reserve
(R45 million). In terms of Spanish legislation a portion of the periods profits should be recognised in a non-distributable reserve. R 20 million of the movement recognised in other reserves relates to the
Farmalider statutory reserve. During the 2017 financial period Ascendis raised equity capital by means of a Rights Offer. Other reserves also iinclude the difference between the R 22,00 subscription price and the
presiding fair value on the date of issue.
Unaudited condensed
group cash flow statement
for the six months ended 31 December 2016
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 December 31 December 30 June
2016 2015 2016
R'000 R'000 R'000
Cash flows from operating activities 406 197 257 908 (280 537)
Interest income 22 999 5 075 32 968
Finance expense (143 233) (54 305) (163 477)
Income taxes paid (85 627) (32 549) (95 167)
Net cash inflow from operating activities 200 336 176 129 (506 213)
Cash flows from investing activities
Purchase of property, plant and equipment (59 020) (93 208) (95 881)
Proceeds on the sale of property, plant
and equipment 14 304 - 36 707
Purchase of other intangibles assets (44 615) (231 538) (83 003)
Proceeds on the sale of intangible assets - - 333
Payment for acquisition of subsidiaries - net of cash (4 583 000) (79 923) (440 160)
Remeasurement on deferred vendor liabilities - 124 857 -
Repayments on deferred vendor liabilities (204 692) (137 394) (10 825)
Repayment of loans advanced to related parties 91 794 23 867 41 724
Loans advanced to related parties (90 075) - -
Proceeds on the sale of other financial assets 9 794 - -
Advance made to acquire other financial assets - (14 888) (27 552)
Net cash utilised in investing activities (4 865 510) (408 227) (578 657)
Cash flows from financing activities
Proceed from issue of shares 2 890 608 - 557 232
Proceed on the sale of treasury shares 3 828 - 6 049
Payments made to acquire treasury shares (65 978) - -
Proceeds from borrowings raised 3 920 760 320 325 926 813
Repayment of borrowings (1 582 688) (80 670) (475 062)
Loans advanced to related parties - - (116)
Finance lease payments (2 310) - (490)
Dividends paid (52 458) (29 440) (57 066)
Net cash inflow from financing activities 5 111 762 210 215 957 360
Net increase/ (decrease) in cash and
cash equivalents 446 588 (21 883) (127 510)
Cash and cash equivalents at beginning of period (22 396) 101 215 101 215
Effect of exchange difference on cash balances (16 888) (2 584) 3 899
Cash and cash equivalents at end of period 407 304 76 748 (22 396)
Group Segmental Analysis
Ascendis Health is a health and care company which owns a portfolio of brands within three core
health care areas, namely Consumer Brands, Pharma-Med and Phyto-Vet. Within these healthcare
areas the Group has five reportable segments.
The Group executive committee (EXCO) considers the three core health care areas, as well as the
reportable segments, to make key operating decisions and assess the performance of the business.
The reportable segments were identified by considering the nature of the products, the production
process, distribution channels, the type of customer, and the regulatory environment in which the
business units operates. In addition to the above similar economic characteristics, such as currency
and exchange regulations, trade zones and the tax environment were also considered to incorporate
and assess the different markets in which the Group operates. The reportable segments are:
- Consumer Brands division (human health), incorporating Sports Nutrition, Skin and all of the
Ascendis over the counter (OTC) and complementary and alternative medicines. This division includes
two reportable segments:
- Consumer Brands Africa segment: Operating predominantly in the South African market.
- Consumer Brands Europe segment: Operating predominantly in the European market.
- Phyto-Vet segment (animal and plant health), incorporating all of the Ascendis animal and plant
health and care products.
- Pharma-Med division (human health), incorporating Ascendis' pharmaceutical business, and its
medical devices business. This division includes two reportable segments:
- Pharma-Med Africa segment: Operating predominantly in the South African market.
- Pharma-Med Europe segment: Operating predominantly in the European market.
Restatement
The Group acquired large international operations during the 2017 financial period. The businesses
acquired operate predominantly in the European market, which is a substantially different economic
and regulatory environment from the South African market. This has resulted in a significant change
in the Group's internal environment and subsequently the reportable segments. Individual operating
segments previously included in Consumer Brands, are now included in Consumer Brands Africa
and Consumer Brands Europe. Pharma-Med Europe was called International in the 2016 annual
financial statements.
(a) Statement of comprehensive income measures applied
Unaudited
Unaudited six months Audited
six months ended year ended
ended 31 December 30 June
31 December 2015 2016
2016 Restated Restated
Revenue split by segment R'000 R'000 R'000
Pharma-Med 1 650 928 1 036 772 2 295 701
Africa 1 000 456 832 879 1 808 204
Europe 650 472 203 893 487 497
Consumer Brands 968 306 478 177 921 836
Africa 357 342 383 263 724 441
Europe 610 964 94 914 197 395
Phyto-Vet 491 041 355 551 700 895
Total revenue 3 110 275 1 870 500 3 918 432
Revenue generated by geographical location
South Africa 1 761 576 1 505 986 3 054 531
Africa 161 348 85 987 153 922
Europe 888 783 262 455 669 442
Other 298 568 16 072 40 537
Total revenue 3 110 275 1 870 500 3 918 432
There has been no inter-segment revenue during the financial period. All revenue figures represents
revenue from external customers.
The Group has an expanding international presence and currently exports products to 109 countries,
mainly in Africa and Europe.
The revenue presented by geographic location represents the domicile of the external customer.
In the December 2015 interim results Ascendis presented the revenue generated based on the geographic
location of the operations. The current presentation provides more detailed information than
previously presented.
54% of the Group's revenue is generated through the wholesale and retail market (2016: 46%). In this
market, 4% (2016: 6%) of the total Group revenue is derived from a single customer and 13% of the
Group revenue is generated from government institutions (local and international).
The Group evaluates the performance of its reportable segments based on EBITDA (earnings before
interest, tax, depreciation and amortisation). The financial information of the Group's reportable
segments is reported to the EXCO for purposes of making decisions about allocating resources to the
segment and assessing its performance.
Unaudited
Unaudited six months Audited
six months ended year ended
ended 31 December 30 June
31 December 2015 2016
2016 Restated Restated
EBITDA split by segment R'000 R'000 R'000
Pharma-Med 374 297 184 587 369 599
Africa 148 561 141 170 278 963
Europe 225 736 43 417 90 636
Consumer Brands 131 715 89 733 206 753
Africa 70 900 71 270 163 250
Europe 60 815 18 463 43 503
Phyto-Vet 74 835 48 959 96 184
Head office (39 674) (36 211) (59 334)
Total EBITDA 541 173 287 068 613 202
Non-controlling interest proportionate share (32 759) (20 724) (46 225)
Total EBITDA attributable to the parent 508 414 266 344 566 977
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 December 31 December 30 June
2016 2015 2016
Reconciliation of EBITDA to consolidated results R'000 R'000 R'000
Consolidated operating profit 383 818 245 215 376 530
Total amortisation and depreciation 99 330 37 153 83 761
Once off costs* 58 025 4 700 152 911
Non-controlling interest proportionate share (32 759) (20 724) (46 225)
Total EBITDA attributable to the parent 508 414 266 344 566 977
* Once off costs relates to restructuring and business combination costs excluded from EBITDA for performance
measurement purposes.
Unaudited
Unaudited six months Audited
six months ended year ended
ended 31 December 30 June
31 December 2015 2016
2016 Restated Restated
Net finance cost split by segment R'000 R'000 R'000
Pharma-Med Africa
Finance income 1 778 2 608 2 321
Finance expense (9 070) (1 346) (20 484)
Pharma-Med Europe
Finance income 133 1 121 2 307
Finance expense (18 214) (32) (76)
Consumer Brands Africa
Finance income 575 833 1 264
Finance expense (581) (561) (2 870)
Consumer Brands Europe
Finance income 207 593 1 097
Finance expense (32 131) (1 086) (2 036)
Phyto-Vet
Finance income 479 126 979
Finance expense (911) (657) (2 073)
Head Office
Finance income 19 518 8 482 26 163
Finance expense (103 299) (57 822) (137 101)
Total consolidated net finance cost (141 517) (47 741) (130 509)
Finance income and costs are managed centrally through the Group's Treasury function housed
within Ascendis Financial Services. All external finance cost are therefore incurred in Ascendis Financial
Services, the EXCO evaluates the finance income and expenses based on utilisation within subsidiaries
as illustrated above.
The European debt facilities raised to finance the acquisition of the recent international acquisitions
are housed within Consumer Brands Europe.
Unaudited
Unaudited six months Audited
six months ended year ended
ended 31 December 30 June
31 December 2015 2016
2016 Restated Restated
Tax expense split by segment R'000 R'000 R'000
Pharma-Med
Africa (13 108) (19 957) (40 785)
Europe (8 057) (2 577) (375)
Consumer Brands
Africa (9 432) (2 689) (7 521)
Europe 959 (289) -
Phyto-Vet (10 761) (5 043) (6 134)
Head office (1 834) (19 549) (6 750)
Total consolidated tax expense (42 233) (50 104) (61 565)
The EXCO monitors taxation expenses per segment to ensure optimal tax practices are being
adhered to.
(b) Statement of financial position measures applied
Unaudited
Unaudited six months Audited
six months ended year ended
ended 31 December 30 June
31 December 2015 2016
2016 Restated Restated
Assets and liabilities split R'000 R'000 R'000
by segment Assets Liabilities Assets Liabilities Assets Liabilities
Pharma-Med
Africa 2 243 214 (531 983) 2 076 780 (1 177 406) 2 223 203 (397 841)
Europe 4 498 418 (1 581 236) 630 823 (416 548) 704 628 (305 338)
Consumer Brands
Africa 990 276 (138 303) 874 071 (438 952) 908 627 (36 596)
Europe 2 939 533 (2 817 554) 369 742 (161 864) 324 485 (49 265)
Phyto-Vet 929 773 (300 534) 622 249 (381 982) 900 856 (254 052)
Head office 691 540 (1 738 194) 38 088 (29 020) 659 920 (2 223 584)
Total consolidated assets
and liabilities 12 292 754 (7 107 804) 4 611 753 (2 605 772) 5 721 719 (3 266 676)
The fixed assets presented below represents the material non-current assets held in various geographic
locations.
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 December 31 December 30 June
2016 2015 2016
Fixed assets by geographic location R'000 R'000 R'000
South Africa 323 572 219 097 324 188
Cyprus 488 213 - -
Other Europe 210 809 37 918 41 276
Fixed assets per geographic location 1 022 594 257 015 365 464
UNAUDITED CONDENSED INTERIM
financial statements
Earnings per share, diluted earnings per share and headline earnings per share (cents)
The calculation of headline earnings per share is based on the profit attributable to equity holders of
the parent, after excluding all items of a non-trading nature, divided by the weighted average number
of ordinary shares in issue during the year. The presentation of headline earnings is not an IFRS
requirement, but is required by JSE Listings Requirements and Circular 2 of 2015.
Weighted average number of shares in issue is calculated as the number of shares in issue at the
beginning of the period, increased by shares issued during the period weighted on a time basis for
the period during which they have participated in the profit of the Group. Shares which are held by
a subsidiary company as treasury shares have been adjusted on a time basis when determining the
weighted average number of shares in issue.
The Group has determined no instruments exist in the interim period that will give rise to the issue of
ordinary shares that results in a dilutive effect. Based on this assessment, basic earning per share also
represents diluted earnings per share.
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 December 31 December 30 June
2016 2015 2016
R'000 R'000 R'000
(a) Basic earnings per share
Profit attributable to owners of the parent 173 499 131 760 158 733
Earnings 173 499 131 760 158 733
Weighted average number of ordinary shares
in issue 413 810 040 270 259 484 277 861 370
Earnings per share (cents) 41.93 48.75 57.13
(b) Headline earnings per share
Profit attributable to owners of the parent 173 499 131 760 158 733
Adjusted for:
Profit on the sale of property, plant and equipment (1 999) (549) (943)
Profit on investment disposal (2 456) (325) (7 535)
Non-controlling interest portion allocation 2 002 - 3 055
Tax effect 211 245 1 062
Headline earnings 171 257 131 131 154 372
Weighted average number of shares in issue 413 810 040 270 259 484 277 861 370
Headline earnings per share - continuing operations 41.39 48.52 55.56
(c) Normalised headline earnings per share
Since Ascendis Health is a pharmaceutical and not an investment company, normalised headline
earnings is calculated by excluding amortisation and certain costs from the Group's earnings. Costs
excluded for normalised headline earnings purposes include restructuring costs to streamline,
rationalise and structure companies in the Group. It also includes the cost incurred to acquire and
integrate the business combinations into the Group and the listed environment.
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 December 31 December 30 June
2016 2015 2016
R'000 R'000 R'000
Reconciliation of normalised headline earnings
Headline earnings 171 257 131 131 154 372
Adjusted for
Once-off business combination costs 54 089 3 200 130 306
Once-off refinancing costs 12 365 - -
Once-off interest on deferred consideration 18 776 1 485 -
Once-off restructuring costs 6 910 - 22 605
Tax effect thereof (836) (1 104) (6 329)
Amortisation 55 519 22 884 48 194
Tax effect thereof (8 175) (6 155) (12 796)
Normalised headline earnings 309 905 151 441 336 352
Weighted average number of shares in issue 413 810 040 270 259 484 277 861 370
Normalised headline earnings per share (cents) 74.89 56.04 121.05
Normalised diluted headline earnings per share is calculated on the same basis used for calculating
diluted earnings per share, other than normalised headline earnings being the numerator.
Notes to the unaudited condensed INTERIM
financial statements
1. Corporate information
Ascendis Health Limited is a health and care brands company. The Group operates through three
divisions: Consumer Brands, Pharma-Med and Phyto-Vet. Its Consumer Brands division consists
of health and personal care products sold to the public, primarily at the retail store level. The
Group offers over the counter (OTC) medicines and consumer brands products, including vitamins
and minerals, homeopathic, herbal products, dermaceuticals, functional foods, functional super
foods, sports nutrition, health beverages, weight management and therapeutic cosmetics. Its
Pharma-Med division consists of the sale of prescription and selected OTC pharmaceuticals,
and includes medical devices. The Phyto-Vet division supplies health and care products to the
plant and animal markets. The Phyto-Vet division manufactures and supplies over 3 500 different
products supplied to over 4 500 retail stores.
These consolidated Group interim financial results as at and for the six months ended
31 December 2016 comprise of the company and its subsidiaries (together referred to as the
Group) and the Group's interest in equity accounted investments.
2. Going concern
The directors consider that the Group has adequate resources to continue operating for the
foreseeable future and that it is therefore appropriate to adopt the going-concern basis in
preparing the Group's financial statements. The directors have satisfied themselves that the Group
is in sound financial position and that it has access to sufficient borrowing facilities to meet its
foreseeable cash requirements.
3. Basis of preparation
The interim consolidated financial statements are prepared in accordance with the requirements
of the JSE Limited Listings Requirements for interim reports, and the requirements of the
Companies Act applicable to interim financial statements. The Listings Requirements require
interim reports to be prepared in accordance with the framework concepts and the measurement
and recognition requirements of International Financial Reporting Standards ("IFRS") and the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by the Financial Reporting Standards Council and also, as a minimum,
contain the information required by IAS 34 Interim Financial Reporting. The accounting policies
applied in the preparation of the interim consolidated financial statements are in terms of IFRS
and are consistent with those accounting policies applied in the preparation of the previous
consolidated annual financial statements.
The unaudited condensed Group interim financial results for the six-month period
ended 31 December 2016 have been prepared under the supervision of Chief Financial Officer
Kieron Futter (CA)SA. The interim financial statements have been prepared on the historical cost
basis, except for the measurement of certain financial instruments and land and buildings at fair
value. The financial statements are prepared on the going concern basis using accrual accounting.
Items included in the annual financial statements of each entity in the Group are measured using
the functional currency of the primary economic environment in which that entity operates. The
interim financial statements are presented in Rand. This represents the presentation and functional
currency of Ascendis Health Limited. The Group owns the following entities which operate in
primary economic environments which are different to the Group:
Farmalider - Spain Remedica - Cyprus
Avima Uganda - Uganda Scitec - Hungary
Akusa - United States of America Ascendis Australia - Australia
Nimue UK-United Kingdom Ascendis International - Malta
Heritage Resources Limited - Isle of Man
For each of these entities a functional currency assessment has been performed. Where the entity
has a functional currency different to that of the Group they are translated upon consolidation in
terms of the requirements of IFRS.
Judgement and estimates
In preparing these unaudited condensed Group interim financial results, management made
judgements, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses.
The significant judgements made by management in applying the Group's accounting policies
and the key source of estimation uncertainty were the same as those applied to the audited group
annual financial statements for the year ended 30 June 2016 with the exception of the following:
As a result of the International acquisitions of Scitec and Remedica, management is required
to apply significant judgements in determining the classification of intangible assets as finite or
indefinite useful assets. The following factors are taken into account when classification is made:
- the period of the entity's control over the asset and any legal or other restriction on its ability to
use the asset;
- the legal, regulatory or contractual provisions that enable renewal or extension of the asset's
legal or contractual life without substantial cost;
- the stability of the industry and economy in which the asset will be deployed;
- the intangible assets track record, relative strength and market recognition commanded by the
intangible asset;
- the age of the intangible asset, including the estimate of useful lives of similar assets-historical
trends, market sentiment and/or the impact of competitive activity;
- the strategy (2017 forecast, specific marketing plans and identification of new markets) in order
to obtain maximum economic benefit of the asset;
- the willingness and ability of the entity to commit resources to maintain the performance of
the asset;
- the illustrative lifecycle of molecule development; and
- the expected pace of technological advances which may result in obsolescence beyond the
expected lifecycle.
4. Business combinations
Being an acquisitive group, the directors and Investment Committee use various internal
measurements and risk mitigating procedures to ensure that acquisitions will be value enhancing
to shareholders.
Currently the Group focuses on two types of acquisitions as defined below:
Platform company
Consist of the main subsidiaries within each sector which have the market share, brands,
operational and administrative infrastructure to stand alone as businesses in their own right. The
platform companies in the three segments in South Africa had been established prior to the listing
of Ascendis in 2013. Part of the internationalisation strategy will be to acquire platform companies
in new territories.
Bolt-on
These are companies, or parts of companies, which can be purchased and "bolted-on" to the
platform in a way that leverages the existing strength of either the bolt-on or the platform in a
synergistic manner, with the result that the two businesses together share the benefits of combined
(or even enhanced) revenue and a lower cost base. Examples include businesses which, after
acquisition, share production facilities, or sales teams, or accounting or administrative functions.
Management's main assumptions in evaluating this as a business acquisition and not an asset
group, were made on the basis that a business consists of inputs and processes applied to those
inputs, that have the ability to create outputs.
(a) The inputs acquired include:
- Tangible items: equipment, infrastructure and working capital necessary for trade within the
business acquired;
- Intangible items: computer software, software licenses, and trademarks;
- Other items not necessarily included in the financial statements: a management team, the
process and know-how of the business, studies and test results, market knowledge, relationships
with the licensing body and management knowledge of the industry.
(b) The processes acquired include: management processes, corporate governance,
organisational structures, strategic goal-setting, operational processes and human and financial
resource management.
(c) The outputs acquired include: access to research results, access to management's strategic
plans, revenue from customers, access to new markets, increased efficiency, synergies, customer
satisfaction and reputation.
During the period Ascendis Health Limited acquired the following businesses:
- Remedica Group 100%
- Scitec Group 100%
A preliminary purchase price allocation has been performed on all business acquisitions which
have been included in the financial results.
The following table illustrates the consideration paid and net assets acquired for each material
subsidiary acquired during the year:
Unaudited
six months Audited year
ended ended
Unaudited six months ended 31 December 30 June
31 December 2016 2015 2016
R'000 R'000 R'000
Remedica Scitec Total Total Total
Cash 2 793 725 2 255 566 5 049 291 154 317 537 035
Equity instruments 224 302 - 224 302 4 347 213 516
Vendor loans 1 262 507 311 058 1 573 565 124 857 195 017
4 280 534 2 566 624 6 847 158 283 521 945 568
Cash and cash equivalents 254 321 211 970 466 291 74 394 96 875
Property, plant
and equipment 511 410 158 375 669 785 32 922 146 688
Intangible assets within
the acquiree 1 246 534 1 015 682 2 262 216 243 818 536 860
Acquired goodwill - 236 217 236 217
Other financial assets 31 44 061 44 092 1 219 37 700
Inventories 282 378 196 293 478 671 77 591 136 345
Trade and other receivables 405 900 138 561 544 461 128 810 206 743
Provisions - - - (150) (29 396)
Trade and other payables (88 605) (146 026) (234 631) (164 663) (250 026)
Borrowings (32 226) (148 546) (180 772) (43 782) (85 611)
Current tax 23 936 (17 124) 6 812 (5) (670)
Contingent liability - - - - (42 277)
Deferred
tax assets/(liabilities) (155 311) (84 515) (239 826) (69 721) (128 486)
Total identifiable net assets 2 448 368 1 604 948 4 053 316 280 433 624 745
Non-controlling interest - - - (121 349) (101 145)
Resultant goodwill 1 832 166 961 676 2 793 842 124 437 421 968
Total cash paid
for acquisitions (2 793 725) (2 255 566) (5 049 291) (154 317) (537 035)
Cash available in
acquired company 254 321 211 970 466 291 74 394 96 875
Cash flow relating to
business combinations (2 539 404) (2 043 596) (4 583 000) (79 923) (440 160)
Ascendis acquired two new platform companies effective 1 August 2016. These acquisitions will
allow Ascendis to significantly grow its European footprint which is currently serviced by Farmalider
S.A. The establishment of a sizeable European platform will support further international growth
and expansion into new geographies both through acquisitions and organically as the newly
acquired international sales and distribution platforms can be utilised to channel existing Ascendis
products. Ascendis will contribute favourably towards the growth of both Remedica and Scitec,
as synergies are achieved in shared services, cross-licensing of pharmaceutical dossiers, product
manufacturing and established routes to the European and developing markets.
The geographical diversification offered by these transactions and their predominant invoicing in
US Dollar and Euro will create a natural Rand hedge. The conclusion of these transactions ensures
that Ascendis maintains its defensive segment mix of over-the-counter and pharmaceutical
operations while enhancing diversification of its sales portfolio across products, channels,
geographies and currencies.
International platform acquisition - Remedica Holdings
Remedica is a pharmaceutical company based in Cyprus. The company has been operating for
over 50 years and is dedicated to the development, production and sale of high quality, safe and
efficacious generic pharmaceuticals. Remedica provides an international platform with its diversified
portfolio of products, markets and clients to transform the Ascendis Pharma-Med division.
The Group has acquired the entire share capital of Remedica. The purchase consideration of
between EUR260 million and EUR335 million (R4 280.5 - R5 447.0 million) will be settled as follows:
- EUR170 million to be paid on completion which assumes a target working capital of EUR50 million
and at least EUR5 million of surplus cash earmarked for future acquisitions.
- EUR90 million deferred for three years (present value of EUR81.175 million based on a pre-discount
rate of 3.5%); and
- an amount to be determined based on the average EBITDA achieved for the three financial years
post-completion of the Remedica transaction subject to certain targets being achieved with the
total payment limited to EUR75 million.
The revenue included in the statement of comprehensive income since 1 August 2016 contributed
by Remedica was R439 million (EUR28.5 million). Remedica also contributed profit after tax of
R139.9 million (EUR9 million) over the same period.
If the subsidiary was acquired on the first day of the financial year, revenue and profits for the year
would have been R529.7 million (EUR34.6 million) and R149.9 million (EUR9.6 million) respectively.
International platform acquisition - Scitec International
The acquisition of a European sports nutrition company, Scitec, complements Ascendis' Consumer
Brands product strategy, as it provides an international platform in the sports nutrition and
nutraceutical industry. Scitec is focused on the marketing, production and distribution of a wide
variety of sports nutrition products targeted at strength training, functional fitness and well-being.
The Group has acquired the entire share capital of Scitec. The purchase consideration of
EUR170 million (R2 566.6 million) will be settled in cash as follows:
- EUR150 million, adjusted for agreed working capital, debt and operating cash, paid on completion
of the transaction.
- EUR20 million, deferred for one year.
The revenue included in the statement of comprehensive income since 1 August 2016 contributed
by Scitec was R541.9 million (EUR35.2 million). Scitec also contributed profit after tax of
R42.3 million (EUR2.7 million) over the same period.
If the subsidiary was acquired on the first day of the financial year, revenue and profits for the year
would have been R658.3 million (EUR43 million) and R49.6 million (EUR3.3 million) respectively.
5. Borrowings and other financial liabilities
For the purposes of financing the acquisition of international businesses, as well as to allow for a
structure that supports growth and an integrated treasury function, Ascendis implemented a new
debt structure arranged and underwritten by ABSA Bank Ltd and HSBC Bank Plc. The structure
consists of a syndicated facility denominated in local currency and Euro term and revolving credit
facilities. During the year, the total remaining debt related to the former local debt structure was
fully paid off.
In terms of the new debt structure, the total facilities drawn down on amounts to R1.4 billion and
EUR180 million.
New international loans
The Group has a EUR180 million facility which has been fully drawn down and matures in
August 2021. The debt balance consists of the Rand translated amount of R2 593 million net of
debt capitalisation costs of R53.5 million yet to be amortised. Capital repayments are due from
June 2017 on a bi-annual basis. Interest is charged at 4% and is repayable quarterly. The Group has
access to a EUR24 million revolving credit facility (R345.8 million) which remains unutilised.
New syndicated South African facility
The syndicated facility is administered through ABSA Bank with various local registered financial
institutions. The R1.4 billion debt drawn down consists of a R810 million facility fully drawn down
and R850 million facility of which R295 million is still available for draw down. The R850 million
facility matures in 2021 with the full capital amount due at the maturation date. Interest is charged
at JIBAR plus 4.2% and is payable quarterly. The R810 million facility is payable bi-annually starting
June 2017 until maturation date of December 2021. Interest is charged at JIBAR plus 3.75%
and is payable quarterly. Included with this balance are debt capitalisation fees of R41.7 million
which is yet to be amortised. Additional unutilised facilities relating to general banking, bank
overdraft and letters of credit amounting to R195 million remain available to serve working capital
funding requirements.
Borrowings are recognised initially at fair value net of transaction costs incurred and thereafter at
amortised cost. The above facilities are subject to financial covenants based on key financial ratios.
No events of default occurred during the period.
The table below provides the detailed breakdown of the individual balances making up the
total balance.
Unaudited Unaudited
six months six months
ended ended Audited year
31 December 31 December ended
2016 2015 30 June 2016
Borrowings at amortised cost
Bond notes - 516 200 514 773
Term loan 3 849 280 294 674 533 859
Revolving credit facility - 250 000 250 000
Farmalider: Government finance 40 386 - 41 197
Other financial liabilities at amortised cost
Other South African borrowings 2 800 264 040 2 839
Farmalider: Caixa Bank 24 816 - 17 981
Farmalider Populat Bank Limited 39 025 - 32 842
Farmalider: Other 13 111 - 9 116
Gane Holdings 26 290 26 290 26 290
3 995 708 1 351 204 1 428 897
Non-current 3 724 716 979 254 1 052 266
Current 270 992 371 950 376 631
3 995 708 1 351 204 1 428 897
The following schedule provides a reconciliation of the movement in borrowings for the six
months ended 31 December 2016:
Unaudited six
months ended
31 December 2016
Capital portion of loan outstanding at beginning of year 1 428 897
Business combinations 180 771
New loans raised net of debt capitalisation fees
Syndicated facility term loans 1 305 799
EURO facility 2 539 601
Farmalider Government finance 53 614
Other financial liabilities 4 243
Capital repaid (1 582 688)
Foreign currency translation (25 600)
Capital portion of loan outstanding at period end 3 904 637
Interest charged 91 071
Total loan balance outstanding at period end 3 995 708
Stated capital
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 December 31 December 30 June
2016 2015 2016
Stated capital R'000 R'000 R'000
Opening balance 2 138 684 1 576 730 1 576 730
Issue of ordinary shares 3 446 239 - 557 890
Listing fees capitalised to stated capital (41 717) (658) (658)
Movement in treasury share on hand (63 802) 15 440 4 722
Closing balance 5 479 404 1 591 512 2 138 684
General issue of shares for cash
Ascendis raised R1.2 billion equity capital by way of a Rights Offer to qualifying shareholders that
concluded in August 2016. 55.5 million shares were offered for subscription to the qualifying
shareholders on the basis of 18.25 Rights Offer Shares for every 100 Ascendis Shares held, at a
subscription price of R22.00 per Rights Offer Share.
As part of the above mentioned transaction, the Group raised capital through the issuance of shares
through private placements, using the Rights Offer subscription price. The total number of shares
issued as part of this transaction was 76.6 million raising a total of R1.7 billion in equity capital.
The Group also raised further capital through the general issuance of shares through private
placements. The Group uses a 30-day volume weighted average price to determine the discount at
which the shares were issued. The total number of shares issued during the course of the financial
period was 4.9 million shares, issued at share prices ranging between R22 and R27 per share, depending
on the share price on the date of issue.
Treasury shares
The unissued shares are under the control of the directors of the company subject to the provisions of
the Companies Act 2008, as amended, and the Listings Requirements of the JSE Limited. The reserve
for the company's treasury shares comprises the cost of the company's shares held by the Group.
Listing fees of R41.7 million have been capitalised. All shares issued were fully paid up.
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 December 31 December 30 June
Reconciliation of number of shares in issue: 2016 2015 2016
Opening balance reported 298 608 269 967 269 967
Issue of shares - ordinary shares 137 066 - 27 144
Treasury shares
Held at the beginning of the period 266 1 763 1 763
Held at the end of period (3 109) (880) (266)
Closing balance 432 831 270 850 298 608
Income tax expense
Unaudited six
months ended Audited year ended
31 December 2016 30 June 2016
R'000 R'000
Major components of the tax expense
South African Taxation
Current
Current period 54 757 101 274
Recognised in current tax for prior periods (1 869) (874)
52 888 100 400
Deferred
Originating and reversing temporary differences (10 925) (41 733)
Increase in tax loss (3 239) -
(14 164) (41 733)
South African income tax expense 38 724 58 667
Foreign Taxation
Current
Current period 13 545 4 088
Recognised in current tax for prior periods (664) (521)
12 881 3 567
Deferred
Originating and reversing temporary differences (8 182) (669)
Increase in tax loss (1 192) -
(9 373) (669)
Foreign income tax expense 3 508 2 898
Income tax expense 42 232 61 565
Tax at the South Africa tax rate 28.00% 28.00%
Exempt income (5.71%) (2.64%)
Foreign tax incentives (6.14%) 0.00%
Tax loss used 0.10% 0.76%
Effect of prior year (0.99%) (7.23%)
Lower foreign tax rates (4.06%) (0.88%)
Foreign exchange differential (0.19%) 0.00%
Disallowable charges-legal/consulting fees 3.68% 12.82%
Other (2.62%) (8.49%)
Donations 0.04% 0.00%
Amortisation 5.39% 1.77%
Fines and penalties 0.01% 0.35%
Average effective tax rate 17.51% 24.46%
Reduction in effective tax rate
The decline in the effective corporate tax rate is predominantly as a result of more favourable corporate
tax rates and tax incentives available to foreign subsidiaries.
Research and development tax credits
Spanish tax legislation provide tax incentives to entities who incur research and development costs.
The incentive is akin to an investment tax credit. The R&D innovation credit is received and recognised
annually since the research and development expenses to which the tax credit relates are key to and
part of the normal business operations of Farmalider (Spanish subsidiary).
Comparative information
To further explain the reduction in the effective corporate tax rate, additional tax disclosure
has been provided in the current set of interim financial statements. The effective tax rate
at 31 December 2015 was 25% and is not considered to be significantly different to the effective tax
rate of 24.47% at 30 June 2016.
6. Dividend
Interim dividend declaration
The board of directors has approved an interim gross ordinary dividend of 11.00 cents per share
(2016: 9.50 cents per share).
The source of the dividend will be from distributable reserves and paid in cash.
Additional information
Dividends Tax ("DT") at the rate of 20% amounting to 2.20 cents per ordinary share will be withheld
in terms of the Income Tax Act. Ordinary shareholders which are not exempt from DT will therefore
receive a net dividend of 8.80 cents per share net of DT.
The company currently has 435 939 348 ordinary shares in issue. Its income tax reference number
is 9810/017/15/3.
Shareholders are advised of the salient dates in respect of the interim dividend:
- Last day to trade "cum" the dividend Tuesday, 9 May 2017
- Shares trade "ex" the dividend Wednesday, 10 May 2017
- Record date Friday, 12 May 2017
- Payment to shareholders Monday, 15 May 2017
Share certificates may not be dematerialised or rematerialised between Wednesday, 10 May 2017 and
Friday, 12 May 2017, both days inclusive.
The directors of the company have determined that dividend payments amounting to R50.00 or
less due to any ordinary shareholder will not be paid unless a written request to the contrary is
delivered to the transfer secretaries, Computershare Investor Services Proprietary Limited, by no
later than close of business on Tuesday, 9 May 2017 being the last day the shares trade "cum" the
dividend. Unpaid dividend amounts will be aggregated with other such amounts and donated to
a charity to be nominated by the directors.
By order of the board
Andy Sims
Company Secretary
8 March 2017
7. Events after reporting period
Phyto-Vet acquisition
Ascendis has entered into an agreement to acquire 100% of the issued share capital of Cipla
Agrimed Proprietary Limited and Cipla Vet Proprietary Limited, both based in South Africa
(SENS: (ASC) 06/03/2017).
Total consideration of the Cipla acquisition will range between R250 million and R500 million
which will be settled out of the existing cash and debt facilities:
- R325 million will be settled on the date of acquisition; and
- Up to R37.5 million additional cash payment two months post the closing date, depending on the
EBITDA target achieved.
- R50 million deferred payment will be settled in July 2018.
This acquisition is an excellent strategic fit for the Phyto-Vet division of Ascendis in therapeutic
areas in which Ascendis did not previously have a strong presence. The completion of this
acquisition is subject to the fulfilment of certain outstanding conditions, which include Competition
Authorities approval.
Consumer Brands Europe acquisition
Ascendis has also finalised negotiations on the international acquisition of Sunwave Pharma SRL and
NHP Natural Health Pharma Limited into the Consumer Brands Europe segment (SENS: (ASC) 08/03/2017).
The total consideration will range between EUR42 million and EUR65 million, depending on the financial
performance of the business over the next three years.
This acquisition will provide Ascendis with an attractive platform into Romanian OTC markets and will
give Ascendis access to a vast complementary medicine portfolio and pipeline of new products,
which can be sold into territories in which Ascendis is active.
Capital repurchase
In terms of the Group's share repurchase programme that has been registered with the JSE,
Ascendis Financial Services acquired 2.8 million shares in Ascendis Health Limited subsequent
to 31 December 2016.
These shares are considered to be treasury shares for the Group and the total value invested in
treasury shares is R59.6 million.
Change in directors of the Company
It is recorded that the following changes took place on the Ascendis board of directors, with effect
10 November 2016, as successfully voted on by the shareholders in the Company's fourth AGM. These
voting results were released by SENS on 11 November 2016.
Osment Philip Cunningham resigned as an Independent non-executive director. He was replaced by
Dr Kinesh Sachidanandan Pather, who is also an Independent non-executive director, in compliance with article
26.3 of the Company's Memorandum of Incorporation.
Ms Mary Sina Bomela was also appointed as an additional Independent non-executive director, as per article
26.2 of the Company's Memorandum of Incorporation
Corporate information
Registration number 2008/005856/06
Income tax number 9810/017/15/3
JSE share code ASC
ISIN ZAE000185005
Registered office 22 Sloane Street, Bryanston, Gauteng, 2191
Postal address PostNet Suite #252, Private Bag X21, Bryanston, 2021
Contact details +27 (0)11 036 9600/info@ascendis.co.za
Sponsor Investec Bank Limited
Auditors PricewaterhouseCoopers Inc
Transfer secretaries Computershare Investor Services Proprietary Limited,
Rosebank Towers, 15 Biermann Avenue,
Rosebank,Johannesburg, 2107
PO Box 61051, Marshalltown, 2107
Company secretary Andy Sims CA(SA)
Directors JA Bester (Chairman) *
Dr K Wellner (CEO)
MS Bomela *
CD Dillon (#)
K Futter (CFO)
B Harie *
Dr KS Pather *
CB Sampson (MD)
GJ Shayne (#)
* Independent non-executive
(#) Non-executive
ASCENDIS HEALTH LTD
22 Sloane Street | Bryanston | Gauteng | South Africa
p +27 (0)11 036 9600 | e info@ascendis.co.za
www.ascendis.co.za
Date: 08/03/2017 07:06:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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