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Voluntary trading statement, update on strategic divestments and further cautionary announcement
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 statement for the six months ended 31 December 2018, update on strategic
divestments and further cautionary announcement
1. Voluntary trading statement for the six months ended 31 December 2018
Revenue from the group’s international operations grew at mid-single digit levels while weak trading
conditions and the poor consumer environment in South Africa resulted in domestic revenue showing
minimal growth.
The gross profit margin improved strongly while increased marketing, distribution and supply chain costs
impacted the EBITDA margin which was flat on the prior period. Higher depreciation and finance costs
resulted in normalised profit after tax for the six months being down mid-single digits.
Normalised headline earnings from continuing operations, which excludes capital profits of R19.6 million
from the sale of the Isando manufacturing facility, are forecast to decline by between 4% and 9%.
Shareholders should note that the earnings per share measures have been impacted by the 4.3%
increase in the weighted average number of shares in issue during the reporting period.
Ascendis Health shareholders are advised that the group’s earnings for the six months ended
31 December 2018 are anticipated to be within the following ranges:
Six months Six months % change Six months % change
ended ended Expected ranges ended Expected ranges
31 Dec 2018 31 Dec 2017 based on 31 Dec 2017 based on reported
Expected ranges Restated restated Reported
Continuing operations
Normalised headline 341 - 358 373 (9%) – (4%) 353 (3%) – 2%
earnings (R’m)
Basic earnings per share 44.3 – 46.6 cents 52.3 cents (15%) – (11%) 52.8 cents (16%) – (12%)
(cents)
Headline earnings per 40.1 – 42.2 cents 52.9 cents (24%) – (20%) 53.4 cents (25%) – (21%)
share (cents)
Normalised headline 70.3 – 73.9 cents 80.2 cents (12%) – (8%) 75.8 cents (7%) – (3%)
earnings per share
(cents)
Total operations
Normalised headline 325 - 341 321 1% - 6% 324 0% - 5%
earnings (R’m)
Basic earnings per share 41.0 – 43.1 cents 41.1 cents 0% – 5% 46.6 cents (12%) – (8%)
(cents)
Headline earnings per 36.8 – 38.7 cents 41.7 cents (12%) – (7%) 47.2 cents (22%) – (18%)
share (cents)
Normalised headline 66.9 – 70.4 cents 69.1 cents (3%) – 2% 69.6 cents (4%) – 1%
earnings per share
(cents)
Notes
a. As announced on SENS on 25 September 2018, the group has disposed of Ascendis Health Sports
Nutrition South Africa. Ascendis Health Direct Selling’s transaction did not materialise and
negotiations are continuing with a potential buyer. These businesses have been classified as
discontinued operations, resulting in the restatement of the comparative information.
b. Normalised headline earnings per share from continuing operations comprise headline earnings per
share from continuing operations adjusted for once-off costs of approximately R61 million (R52 million
in the comparative period to December 2017) as well as amortisation costs.
c. The results to December 2018 include Kyron Laboratories which was acquired on 1 March 2018 and
therefore not included in the results for the comparative period to December 2017.
The financial information on which this voluntary trading statement is based has not been reviewed or
reported on by the group’s auditors.
The group’s financial results for the six months ended 31 December 2018 will be released on SENS on
Monday, 18 March 2019. The investor presentation in Johannesburg will be held on Monday, 18 March
and will be webcast live at 10:00 a.m. SA time and will be accessible at the following link:
www.corpcam.com/Ascendis18032019. The investor presentation in Cape Town will be held on
Tuesday, 19 March at 10:00 a.m.
2. Strategic divestments
Following the strategic business review undertaken in 2018, selected businesses and assets were
identified as non-core to the group’s strategy and accordingly classified for divestment.
Biosciences
The Biosciences business, comprising Avima/Klub 5, Efekto, Marltons and Afrikelp, was considered as
non-core to the group’s new strategy. The board of directors of Ascendis Health has resolved to dispose
of the Efekto, Marltons and Afrikelp businesses and negotiations for the sale are well advanced.
Shareholders will be updated on developments relating to the disposal of these businesses. The
Avima/Klub 5 businesses may be considered for disposal in the short to medium term.
Isando manufacturing facility
As announced on SENS on 20 December 2018, the sale of the Isando manufacturing facility was
concluded for a total cash consideration of R130 million. The first payment of R102 million has been
received and R28 million is to be paid by the end of April 2019. All conditions precedent to the
transaction, including Competition Commission approval, have accordingly been fulfilled.
3. Remedica offer and further cautionary announcement
Shareholders are referred to the cautionary and cautionary renewals announcements published on
SENS on 14 January 2019 and 8 February 2019 respectively, relating to an unsolicited offer received
for the Remedica business unit (“Remedica”) in Cyprus. Ascendis Health is involved in ongoing
negotiations regarding the potential disposal of Remedica and will update investors should a transaction
be concluded.
Shareholders are advised to continue to exercise caution when dealing in the Company’s securities until
a further announcement is made.
8 March 2019
Bryanston
Sponsor
Questco Corporate Advisory Proprietary Limited
Date: 08/03/2019 01:24:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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