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Voluntary Trading Update 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”)
VOLUNTARY TRADING UPDATE FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
The board of directors of Ascendis Health (“the Board”) wishes to provide an update to shareholders on the
performance of Ascendis Health and its subsidiaries (the “Group”) for the 6 months ended 31 December 2019 (“the
Current Period”) relative to the 6 months ended 31 December 2018 (“the Prior Period”). The expected revenue and
normalised earnings before interest, tax, depreciation and amortisation (“EBITDA”) lower and higher ranges for the
Current Period are presented below, along with the Prior Period figures and the percentage change between the lower
and higher Current Period figures compared to the Prior Period:
REVENUE
Six months ended Six months ended Six months ended
% change % change
31 Dec 2019 31 Dec 2019 31 Dec 2018
Lower range Higher range (Restated)1 Lower range Higher range
INTERNATIONAL
2
Remedica (€’m) 54.0 56.7 42.8 26% 33%
Sun Wave Pharma (€’m) 26.0 27.4 20.6 26% 33%
Scitec (€’m) 37.0 38.9 37.7 (2%) 3%
Farmalider (€’m) 16.5 17.3 18.1 (9%) (4%)
Other (€’m) - - 0.5
Total International - €’m 133.5 140.3 119.7 12% 17%
Total International - R’m 2 173 2 285 1 958 11% 17%
SOUTH AFRICA
Pharma (R’m) 351 369 336 4% 10%
Medical (R’m) 683 718 638 7% 13%
Consumer Health (R’m) 456 479 491 (7%) (2%)
Biosciences (R’m) 211 222 517 (59%) (57%)
Animal Health (R’m) 233 245 245 (5%) -
Intercompany
(102) (107) (181)
elimination (R’m)
Total South Africa (R’m) 1 832 1 926 2 046 (11%) (6%)
GROUP (INTERNATIONAL + SOUTH AFRICA)
Total Group - R’m 4 005 4 211 4 004 0% 5%
Less: Discontinued
(250) (262) (566) (56%) (54%)
operations (R’m)
Group – continuing - R’m 3 755 3 949 3 438 9% 15%
NORMALISED EBITDA3
Six months ended Six months ended Six months ended
% change % change
31 Dec 2019 31 Dec 2019 31 Dec 2018
Lower range Higher range (Restated)1 Lower range Higher range
INTERNATIONAL
Remedica (€’m)2 16.1 17.8 14.0 15% 27%
Sun Wave Pharma (€’m) 7.0 7.7 5.8 21% 34%
Scitec (€’m) 1.2 1.3 0.9 29% 42%
Farmalider (€’m) - - 4.2 (100%) (100%)
Other (€’m) - - (0.1)
Total International - €’m 24.3 26.8 24.8 (2%) 8%
Total International - R’m 394 436 405 (3%) 8%
SOUTH AFRICA
Pharma (R’m) 3 3 (2) 269% 287%
Medical (R’m) 130 144 133 (2%) 8%
Consumer Health (R’m) 33 36 29 12% 24%
Biosciences (R’m) 12 13 84 (86%) (85%)
Animal Health (R’m) 59 65 46 28% 42%
Total South Africa (R’m) 237 261 290 (18%) (10%)
GROUP (INTERNATIONAL + SOUTH AFRICA)
Group head office costs
(49) (54) (50) (2%) 8%
(R’m)
Total Group - R’m 582 643 645 (10%) 0%
Less: Discontinued
(7) (8) (66) (89%) (88%)
operations (R’m)
Group – continuing - R’m 575 635 579 (1%) 10%
(1) The following 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 a sale completed on 31 July
2019;
- The two remaining businesses in the Biosciences division, Avima and Klub M5, are being considered for
sale; and
- Ascendis Direct Selling
(2) The Remedica business unit in Cyprus, that was classified as a discontinued operation for the year ended 30
June 2019, is now being classified as a continuing operation after negotiations for the sale of the business
were terminated in December 2019.
(3) Performance Measure (“PM”): Shareholders are advised that normalised EBITDA is not a term defined by
International Financial Reporting Standards and may accordingly differ from company to company. The Board
however believes that normalised EBITDA is a relevant performance measure as it provides a measure of cash
earnings. The normalised EBITDA figures have been calculated consistently with Ascendis Health’s
methodology for the calculation of normalised EBITDA as set out on its website.
Commentary
The growth in International revenue and normalised EBITDA compared to the Prior Period is driven primarily by higher
sales in Europe due to new tender business secured by Remedica and new product launches by Sun Wave Pharma.
This was partially offset by increased market competition in Scitec’s core markets and lower licence fee revenue in
Farmalider.
Revenue growth in South Africa is due to the recovery from prior year supply issues in Pharma, new agency contracts
in Medical Devices and new tender awards in Animal Health.
Growth in normalised EBITDA was driven by higher gross profit as a result of the increased revenue partly negated by
increased provisions for legal fees in Farmalider relating to a dispute with a supplier and increased investment in
marketing in Europe and South Africa.
The group incurred extensive legal and advisor fees associated with the restructuring of the senior lender debt, and
other once-off costs related to the disposal of Biosciences and the Remedica negotiations as well as a considerable
increase in finance expenses associated with the interim stability agreements with the senior lenders.
An impairment loss for goodwill and intangible assets of R24m was recognised in respect of the Direct Selling business
owing to the deterioration in the trading performance.
These additional costs and impairments have had a considerable adverse impact on profit after tax compared to the
Prior Period.
The financial information on which this trading update is based has not been reviewed or reported on by the
Company’s external auditors.
The financial results for the 6 months to 31 December 2019 are expected to be released on or about Wednesday,
11 March 2020. The Company will issue a trading statement on SENS to provide earnings guidance to shareholders
once the board and management has reasonable certainty on the expected financial performance for the Current
Period, in line with the JSE Listings Requirements.
Annual general meeting
At the annual general meeting (“AGM”) starting at 09:00 today, management will provide further commentary on the
business unit performance for the Current Period and an update on the group’s strategy.
The AGM will be webcast live. The webcast link is accessible on the home page of the Company’s website
www.ascendishealth.com
5 February 2020
Bryanston
Sponsor
Questco Corporate Advisory Proprietary Limited
Date: 05-02-2020 08:00:00
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