Wrap Text
Business Update and Trading Statement for the Financial year ended 30 June 2025
ASPEN PHARMACARE HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 1985/002935/06
JSE Share code: APN
ISIN: ZAE000066692
LEI: 635400ZYSN1IRD5QWQ94
("Aspen" or "the Group")
BUSINESS UPDATE AND TRADING STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2025
Group Update:
The Group has demonstrated resilience during a challenging financial year. Notable events over the
reporting period ("FY 2025"):
• Commercial Pharmaceuticals, Aspen's core business segment comprising more than 70% of the
Group's revenue, has delivered double digit revenue and normalised EBITDA growth in constant
exchange rate ("CER") underpinned by organic revenue growth in all three segments (Injectables,
OTC and Prescription). This has been supplemented by the launch and rollout of Mounjaro® in
South Africa, while also benefiting from the acquired product portfolio in Latam. Reported
performance has been diluted by the strength of the ZAR average exchange rates against Aspen's
major trading currencies;
• Considerable progress has been made in executing the Group's generic semaglutide GLP-1 strategy;
• The restructure of Aspen China and its integration with the acquired Sandoz business has been
completed. Consequently, significant restructuring costs of circa R0,5 billion were incurred in H2
2025 as well as one-off inventory rationalisation and write-offs. These diluted the Group's
Injectables gross profit margin percentage in FY 2025 but is expected to revert to normal levels in
FY 2026. The restructured China business, supported by higher EBITDA margins, is now well
positioned to contribute positively towards earnings in FY 2026;
• Manufacturing performance and intangible asset impairments have been negatively impacted by
the material contractual dispute ("Dispute") announced on SENS on 22 April 2025, whereby
shareholders were advised that normalised EBITDA from the Manufacturing business for FY 2025
in CER would potentially be R2 billion lower than last guided in March 2025. The Dispute, the details
of which are subject to contractual confidentiality, relates to a manufacturing and technology
agreement with a contract manufacturing customer for mRNA products. As a consequence of the
Dispute and related risks, normalised EBITDA from the Manufacturing business for FY 2025 in CER
is expected to be circa 40% of that reported in FY 2024. The Dispute is now the subject of a
contractually prescribed adjudication process;
• Aspen is pleased to report that the validation stage of the insulin contract has been successfully
completed in our South African sterile facility with commercial production commencing in FY 2026
pending final regulatory approval;
• The retrospective implementation of global minimum tax legislation in South Africa coupled with
the announcement by the Mauritian government of a Qualified Domestic Minimum Top Up Tax
("QDMTT") of 15%, effective from FY 2025, has negatively impacted both, Commercial
Pharmaceuticals brand valuations and Group effective tax rates. As guided previously, higher Group
effective tax rates are expected to be sustained. The QDMTT has materially increased the tax rate
used for Commercial Pharmaceuticals brand related intangible asset valuations increasing
impairments by R1,7 billion. These intangible assets are only impaired if their individual asset value
is below carrying amount and are not revalued where their value exceeds carrying amount. Despite
the negative impact of the QDMTT, brand related intangible assets still have a valuation of more
than 50% greater than their carrying amount;
• The abovementioned impairments totalling R4,1 billion, which includes the QDMTT related impact
of R1,7 billion, the mRNA asset impairment of R0,8 billion and market related impairments of R1,6
billion, have resulted in the Group incurring a loss for the year. These impairments and the
increased restructuring costs have adversely impacted Aspen's earnings per share ("EPS") and
headline earnings per share ("HEPS") as compared to the Group's primary measure of performance
being normalised headline earnings per share ("NHEPS");
• Operating cash conversion rate is expected to well exceed the Group's target of 100% and the net
debt leverage ratio is anticipated to end between 3.15x and 3.2x. Net debt is expected to be
marginally higher than the R30 billion in H1 2025, negatively affected by the weaker ZAR year-end
closing rates partly offset by the stronger second half CER operating cash flows and lower inventory
levels; and
• Finance costs benefited from interest rate cuts across the Group's EUR, ZAR and AUD debt pools in
the second half of the year. Despite this, year-on-year finance costs have risen, influenced by higher
net debt levels and increased foreign exchange losses driven by US tariff-led global volatility in
exchange rates.
Prospects
Aspen is focused on optimisation strategies for its Manufacturing business and building on the gains made
in Commercial Pharmaceuticals.
The Finished Dose Form segment of the Manufacturing business is focused on recovering lost profitability
by FY 2027. Key to achieving this objective are:
• Commercialising the insulin contract, following an intensive technical transfer process. This is an
exciting opportunity for both Aspen and patients. Resultant revenue of R0,3bn is forecast for FY
2026, ramping up to more than R1bn for FY 2027;
• Reshaping both Aspen's French and South African sterile facilities to match resources with the
existing contracts on hand. It is intended that most of the restructuring will be addressed in this
calendar year; and
• The benefits of both increased revenue and cost reductions will positively impact H2 2026 and are
expected to be fully realised in FY 2027.
Aspen is well positioned to execute on its strategic opportunities that will further enhance Manufacturing
profitability which include, inter alia:
• Procuring regulatory approval from SAHPRA and WHO for the Serum paediatric vaccines, to be
followed by commercialisation with potential sales in calendar year 2026 and increased volumes
thereafter;
• On-boarding GLP-1 injectable production volumes at both the French and South African sterile
facilities following the launch of Aspen's generic semaglutide strategy; and
• Securing further contracts in the South African and French sterile facilities.
The Group anticipates continued consistent performance from the Active Pharmaceutical Ingredients and
Heparin segments within the Manufacturing business.
For FY 2026, Commercial Pharmaceuticals is expected to record mid-single digit organic revenue and
stronger EBITDA growth in CER, supported by a higher profit contribution from the reshaped business in
China and further incremental growth from Mounjaro in South Africa following the recent regulatory
approval of the Kwikpen® delivery system indicated for type 2 diabetes management and pending approval
of the chronic weight management indication. Aspen has also recently concluded a long-term distribution
and promotional agreement with Boehringer Ingelheim for its product portfolio in South Africa effective
from 1 September 2025.
Considerable progress has been made in executing on Aspen's generic semaglutide GLP-1 strategy (sterile
injectable products for the treatment of type 2 diabetes and obesity). This has required extensive
investment in both IP and infrastructure. To give the Group every chance of success, Aspen has followed a
strategy of both developing its own IP and licensing/partnering on IP with licensors. Dr. Reddy's
Laboratories is a key partner. It is anticipated that the first revenue from this initiative could be as early as
the latter part of FY 2026. No such revenue has been included in the Commercial Pharmaceuticals guidance
detailed above.
The continued strong focus on working capital, underpinned by enhanced Manufacturing efficiencies, and
coupled with an expected lower investment in capital expenditure, following higher GLP-1 and sterile
related investments in FY 2025, should assist the Group in reducing net debt levels and achieving an
operating cash conversion rate target of greater than 100% in FY 2026.
Earnings ranges
Shareholders are advised that Aspen is currently finalising its annual financial results for the year ended
30 June 2025. In accordance with paragraph 3.4(b)(i) of the JSE Limited Listings Requirements, issuers must
publish a trading statement as soon as they are satisfied that a reasonable degree of certainty exists that
the financial results for the period to be reported upon will differ by at least 20% from the financial results
for the previous corresponding period.
NHEPS, HEPS and EPS for the year ended 30 June 2025 compared to the prior year are expected to fall
within the ranges reflected in the table below:
Earnings Expected decrease (%) Expected range Reported
measures
30 June 2025 (CPS) 30 June 2024 (CPS)
NHEPS(*) -27% to -32% 1 089.2 to 1 014.6 1 492.1
HEPS -40% to -45% 814.0 to 746.1 1 356.6
EPS -123% to -128% -228.0 to -277.6 991.4
(*) NHEPS - Comprises of HEPS, adjusted for specific non-trading items in accordance with Aspen's accounting policies
NHEPS is the primary measure used by management to assess Aspen's underlying financial performance.
HEPS for the year ended 30 June 2025 has been negatively impacted by the high restructuring costs incurred
in China.
EPS for the year ended 30 June 2025 has also been negatively impacted by the higher intangible asset
impairments.
The financial information on which this trading statement is based has not been reviewed or reported on
by Aspen's external auditors.
Shareholders are advised that Aspen intends on releasing its results for the year ended 30 June 2025 on
Wednesday, 3 September 2025 via JSE SENS at 13:00pm (SAST, GMT+2), with a presentation to members
of the investment community via webcast on Thursday, 4 September 2025 at 08:30am (SAST, GMT+2).
All interested stakeholders are invited to watch the live webcast which can be accessed using the link
provided here: https://www.corpcam.com/Aspen04092025.
The slides accompanying the presentation will be available on the home page of the Aspen website
(www.aspenpharma.com) shortly before the commencement of the presentation on Thursday, 4
September 2025.
A playback of the webcast will be made available on our website approximately 2 hours after the
presentation.
Durban
21 August 2025
Sponsor
Investec Bank Limited
Date: 21-08-2025 05:40:00
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