Financial information

celebrating 20 years Additional Group financial information

for the year ended 30 June 2018

Illustrative constant exchange rate report on selected financial data

The Group has presented selected line items from the consolidated statement of comprehensive income and certain trading profit metrics on a constant exchange rate basis in the tables below.

The pro forma constant exchange rate information is presented to demonstrate the impact of fluctuations in currency exchange rates on the Group's reported results. The constant exchange rate report is the responsibility of the Group's Board of Directors and is presented for illustrative purposes only. Due to the nature of this information, it may not fairly present the Group's financial position, changes in equity and results of operations or cash flows. The pro forma information has been compiled in terms of the JSE Listings Requirements and the Revised Guide on Pro Forma information by SAICA and the accounting policies of the Group as at 30 June 2018. The illustrative constant exchange rate report on selected financial data has been derived from the audited financial information and has been reported on by Aspen's auditors in an assurance report, which is available for inspection at the Company's registered office.

The Group's financial performance is impacted by numerous currencies which underlie the reported trading results, where even within geographic segments, the Group trades in multiple currencies ("source currencies"). The constant exchange rate restatement has been calculated by adjusting the prior year's reported results at the current year's reported average exchange rates. Restating the prior year's numbers provides illustrative comparability with the current year's reported performance by adjusting the estimated effect of source currency movements.

The listing of average exchange rates against the Rand for the currencies contributing materially to the impact of exchange rate movements are set out below:

2018
average
rates
2017
average
rates
EUR – Euro 15,326 14,840
AUD – Australia Dollar 9,965 10,261
USD – US Dollar 12,856 13,612
CNY – Chinese Yuan Renminbi 1,975 1,999
JPY – Japanese Yen 0,116 0,125
MXN – Mexican Peso 0,686 0,700
BRL – Brazilian Real 3,867 4,198
GBP – British Pound 17,291 17,271
CAD – Canadian Dollar 10,126 10,262
RUB – Russian Ruble 0,218 0,224
PLN – Polish Zloty 3,620 3,440

Revenue, other income, cost of sales and expenses

For purposes of the constant exchange rate report the prior year's source currency revenue, cost of sales and expenses have been restated from the prior year's relevant average exchange rate to the current year's relevant reported average exchange rate.

Interest paid net of investment income

Net interest paid is directly linked to the source currency of the borrowing on which it is levied and is restated from the prior year's relevant reported average exchange rate to the current year's relevant reported average exchange rate.

Tax

The tax charge for purposes of the constant currency report has been recomputed by applying the actual effective tax rate to the restated profit before tax.

Reported
June 2018
(At 2018
average
rates)
R’million
Reported
June 2017
(At 2017
average
rates)
R’million
Change at
reported
exchange
rates
%
Illustrative
constant
exchange rates
June 2017
(At 2018
average
rates)
R’million
Change at
constant
exchange
rates
%
Revenue 42 596 41 213 3 40 690 5
Gross profit 21 605 19 896 9 19 777 9
Normalised EBITDA 12 031 11 416 5 11 427 5
Operating profit 9 237 8 321 11 8 342 11
Normalised headline earnings 7 325 6 678 10 6 675 10
Earnings per share (cents) 1 316,6 1 123,4 17 1 116,2 18
Headline earnings per share (cents) 1 468,8 1 299,5 13 1 288,1 14
Normalised headline earnings per share (cents) 1 604,9 1 463,2 10 1 462,5 10
Reported
June 2018
(At 2018
average
rates)
%
Reported
June 2017
(At 2017
average
rates)
%
Revenue Currency mix
EUR – Euro 27 26
ZAR – South African Rand 20 20
AUD – Australia Dollar 13 14
USD – US Dollar 7 11
CNY – Chinese Yuan Renminbi 6 4
JPY – Japanese Yen 5 5
MXN – Mexican Peso 3 3
BRL – Brazilian Real 3 3
GBP – British Pound 2 2
CAD – Canadian Dollar 1 1
RUB – Russian Ruble 1 2
PLN – Polish Zloty 1 1
Other currencies 11 8
Total 100 100

Summarised Group segmental analysis

Reported
June 2018
(At 2018
average
rates)
R’million
Reported
June 2017
(At 2017
average
rates)
R’million
Illustrative
constant
exchange rates
June 2017
(At 2018
average
rates)
R’million
Change at constant exchange
rates
%
Commercial Pharmaceuticals by customer geography 33 270 31 437 30 947 8
Sub-saharan Africa 8 127 7 459 7 402 10
Developed Europe 7 434 6 817 6 941 7
Australasia 4 816 4 799 4 658 3
Latin America 2 929 2 722 2 577 14
Developing Europe & CIS 2 780 2 589 2 611 6
China 2 415 1 753 1 748 38
Japan 1 930 1 932 1 812 7
Other Asia 1 401 1 206 1 148 22
MENA 877 1 117 1 049 (16)
USA & Canada 561 1 043 1 001 (44)
Manufacturing revenue by geography of manufacture
Manufacturing revenue – finished dose form 1 644 2 141 2 100 (22)
Developed Europe 636 638 667 (5)
Sub-saharan Africa 532 1 031 975 (45)
Australasia 464 472 458 1
Latin America 12 100
Manufacturing revenue – active pharmaceutical ingredients 4 591 4 411 4 480 2
Developed Europe 4 259 3 976 4 263
Sub-saharan Africa 332 435 217 53
Total manufacturing revenue 6 235 6 552 6 580 (5)
Total pharmaceuticals 39 505 37 989 37 527 5
Nutritionals by customer geography 3 091 3 224 3 163 (2)
Latin America 1 290 1 462 1 414 (9)
Sub-saharan Africa 1 017 967 977 4
Australasia 715 795 772 (7)
China 65 100
MENA 4 100
Total revenue 42 596 41 213 40 690 5
Summary of regions
Developed Europe 12 329 11 431 11 871 4
Sub-saharan Africa 10 008 9 892 9 571 5
Australasia 5 995 6 066 5 888 2
Latin America 4 231 4 184 3 991 6
Developing Europe & CIS 2 780 2 589 2 611 6
Japan 2 480 1 753 1 748 42
China 1 930 1 932 1 812 7
Other Asia 1 401 1 206 1 148 22
MENA 881 1 117 1 049 (16)
USA & Canada 561 1 043 1 001 (44)
Total revenue 42 596 41 213 40 690 5

Summarised Group segmental analysis

Commercial pharmaceuticals therapeutic area analysis

Reported June 2018 (At 2018 average rates)
Anaesthetic
Brands
R’million
Thrombosis
Brands
R’million
High Potency
& Cytotoxic
Brands
R’million
  Therapeutic
Focused
Brands
R’million
Regional
Brands
R’million
Total
R’million
By customer geography
Commercial Pharmaceuticals
Sub-saharan Africa 143 9 99   251 7 876 8 127
Developed Europe 2 170 3 471 1 417   7 058 376 7 434
Australasia 713 21 477   1 211 3 605 4 816
Latin America 762 71 790   1 623 1 306 2 929
Developing Europe & CIS 434 1 876 406   2 716 64 2 780
China 1 779 616 20   2 415 2 415
Japan 1 213 48 372   1 633 297 1 930
Other Asia 658 151 262   1 071 330 1 401
MENA 156 159 193   508 369 877
USA & Canada 304 8 136   448 113 561
Total Commercial Pharmaceuticals 8 332 6 430 4 172   18 934 14 336 33 270
Reported June 2017 (At 2017 average rates)
Anaesthetic’s
Brands
R’million
Thrombosis
Brands
R’million
High Potency
& Cytotoxic
Brands
R’million
  Therapeutic
Focused
Brands
R’million
Regional
Brands
R’million
Total
R’million
By customer geography
Commercial Pharmaceuticals
Sub-saharan Africa 144 7 126   277 7 182 7 459
Developed Europe 1 700 3 168 1 472   6 340 477 6 817
Australasia 639 25 483   1 147 3 652 4 799
Latin America 605 92 838   1 535 1 187 2 722
Developing Europe & CIS 317 1 714 472   2 503 86 2 589
China 1 453 252 48   1 753 - 1 753
Japan 1 293 46 408   1 747 185 1 932
Other Asia 429 176 258   863 343 1 206
MENA 231 169 275   675 442 1 117
USA & Canada 254 16 307   577 466 1 043
Total Commercial Pharmaceuticals 7 065 5 665 4 687   17 417 14 020 31 437
Illustrative constant exchange rate June 2017 (June 2017 at 2018 average rates)
Anaesthetic
Brands
R’million
Thrombosis
Brands
R’million
High Potency
& Cytotoxic
Brands
R’million
  Therapeutic
Focused
Brands
R’million
Regional
Brands
R’million
Total
R’million
By customer geography
Commercial Pharmaceuticals
Sub-saharan Africa 145 7 126   278 7 124 7 402
Developed Europe 1 732 3 204 1 529   6 465 476 6 941
Australasia 621 25 467   1 113 3 545 4 658
Latin America 571 87 803   1 461 1 116 2 577
Developing Europe & CIS 307 1 760 464   2 531 80 2 611
China 1 435 266 47   1 748 1 748
Japan 1 204 57 379   1 640 172 1 812
Other Asia 412 166 246   824 324 1 148
MENA 228 166 242   636 413 1 049
USA & Canada 251 15 293   559 442 1 001
Total Commercial Pharmaceuticals 6 906 5 753 4 596   17 255 13 692 30 947
% Change constant exchange rates
Anaesthetic Brands
%
Thrombosis Brands
%
High Potency
& Cytotoxic Brands
%
  Therapeutic
Focused
Brands
%
Regional
Brands
%
Total
%
 
By customer geography
Commercial Pharmaceuticals
Sub-saharan Africa (1) 29 (21)   (10) 11 10
Developed Europe 25 8 (7)   9 (21) 7
Australasia 15 (16) 2   9 2 3
Latin America 33 (18) (2)   11 17 14
Developing Europe & CIS 41 7 (13)   7 (20) 6
China 24 >100 (57)   38 0 38
Japan 1 (16) (2)   0 73 7
Other Asia 60 (9) 7   30 2 22
MENA (32) (4) (20)   (20) (11) (16)
USA & Canada 21 (47) (54)   (20) (74) (44)
Total Commercial Pharmaceuticals 21 12 (9)   10 5 8

Three-year review

  10-year
CAGR
%
IFRS
Year ended
30 June 2018
R’million
Year ended
30 June 2017
R’million
Year ended
30 June 2016
R’million
Group income statements
Revenue   27 42 596 41 213 35 559
Gross profit   27 21 605 19 896 17 900
Normalised EBITDA 12 031 11 416 10 105
Total amortisation, depreciation and non-trading adjustments   37 (2 794) (3 095) (1 136)
Operating profit   24 9 237 8 321 8 969
Net financing costs   40 (1 892) (2 082) (2 866)
Profit before tax   22 7 396 6 252 6 121
Profit after tax   24 6 011 5 128 4 328
Group statements of financial position
Assets
Non-current assets
Intangible assets 72 163 60 006 49 067
Property, plant and equipment 11 368 9 749 9 670
Goodwill 6 126 5 940 6 020
Deferred tax assets 966 987 1 093
Other non-current assets 1 991 1 548 1 288
Total non-current assets 92 614 78 230 67 138
Current assets
Inventories 14 496 13 611 14 396
Trade and other receivables 14 421 13 592 11 729
Cash and cash equivalents 11 170 10 707 10 934
Total operating current assets 40 087 37 910 37 059
Assets classified as held-for-sale 135 200 87
Total current assets 40 222 38 110 37 146
Total assets 132 836 116 340 104 284
Equity and liabilities
Ordinary shareholders' equity 50 067 43 111 42 508
Non-controlling interests 28 27 27
Total shareholders' equity 50 095 43 138 42 535
Non-current liabilities
Borrowings 46 725 28 978 32 653
Other non-current financial liabilities 5 594 7 333 6 270
Deferred tax liabilities 2 213 2 085 1 753
Total non-current liabilities 54 532 38 396 40 676
Current liabilities
Borrowings 11 225 18 860 10 975
Trade and other payables 10 414 10 257 8 184
Other current financial liabilities 6 570 5 689 1 914
Total current liabilities 28 209 34 806 21 073
Total equity and liabilities 132 836 116 340 104 284
Group statements of cash flows  
Cash operating profit   25 11 907 10 817 9 794
Working capital movements   16 (1 579) (915) (3 381)
Cash generated from operations   27 10 328 9 902 6 413
Net financing costs paid (2 077) (2 200) (1 993)
Tax paid   26 (1 495) (1 502) (1 505)
Cash generated from operating activities 7 017 6 487 3 225
Cash (used in)/generated from investing activities (12 813) (11 617) 1 063
Cash generated from/(used in) financing activities 6 333 4 956 (3 123)
Translation effects on cash and cash equivalents of foreign operations 389 (526) (136)
Movement in cash and cash equivalents 926 (700) 1 029
Cash and cash equivalents at the beginning of the year 7 188 7 888 6 859
Cash and cash equivalents at the end of the year 8 114 7 188 7 888
Share performance  
Earnings per share cents 20 1 316,6 1 123,4 945,4
Diluted earnings per share cents 21 1 316,6 1 123,4 945,2
Headline earnings per share cents 21 1 468,8 1 299,5 889,0
Diluted headline earnings per share cents 22 1 468,8 1 299,5 888,8
Normalised headline earnings per share cents 23 1 604,9 1 463,2 1 263,7
Diluted normalised headline earnings per share cents 23 1 604,9 1 463,2 1 263,4
Capital distribution/dividend per share cents 17 287,0 248,0 216,0
Net asset value per share cents 33 10 980,3 9 453,7 9 320,5
Operating cash flow per share cents 22 1 537,3 1 421,4 706,7
Share information
Number of shares in issue – at year-end million   456,5 456,4 456,4
Number of shares in issue (net of treasury shares) – at year-end million   456,0 456,0 456,1
Weighted number of shares in issue million   456,5 456,4 456,4
Diluted weighted number of shares in issue million   456,5 456,4 456,5
Market capitalisation at year-end R'billion 25 117,9 130,9 165,3
JSE statistics
Number of shares traded   million 324,1 410,0 268,8
Number of shares traded as % of weighted average number of shares   % 71,0 89,8 58,9
Market price per share
   – year-end   cents 25 822 28 710 36 228
   – highest   cents 32 759 38 849 37 824
   – lowest   cents 22 987 25 564 23 802
Key market performance ratios
Earnings yield   % 6,2 5,1 3,5
Price:earnings ratio   times 16,1 19,6 28,7
Business performance
Profitability – measures financial performance of the Group
Return on ordinary shareholders' equity   % 12,2 12,2 10,6
Return on total assets   % 10,3 11,5 11,1
Return on net assets   % 15,1 14,9 14,8
Revenue growth   % 3,4 15,9 (1,6)
Gross margin   % 50,7 48,3 50,3
Normalised EBITDA margin   % 28,2 27,7 28,4
Effective tax rate   % 18,7 18,0 29,3
Liquidity – measures the Group's ability to meet its maturing obligations and unexpected cash needs in the short term
Current ratio   times 1,4 1,1 1,8
Quick ratio   times 0,9 0,7 1,1
Cash ratio   times 0,4 0,3 0,6
Working capital as % of revenue   % 42,6 49,9 49,9
Debt indicators – measures the Group's ability to meet capital and interest payments over the long term
Net borrowings   R'million 46 780 37 131 32 694
Leverage ratio   times 3,78 3,25 3,31
Net interest cover   times 6,4 5,8 6,1
Gearing ratio   % 48 47 44

Comparative figures have been restated to conform with changes in presentation.

Definitions and formulas

Cash ratio
Cash and cash equivalents
Current liabilities (excluding liabilities associated with assets held-for-sale) – bank overdrafts
 
Current ratio
Current assets (excluding assets classified as held-for-sale)
Current liabilities (excluding liabilities associated with assets held-for-sale)
 
Earnings yield (%)
Normalised headline earnings per share
Market price per share at year-end
 
EBITDA growth (%)
Normalised EBITDA (current year) – Normalised EBITDA (prior year)
Normalised EBITDA (prior year)
 
Effective tax rate (%)
Tax
Profit before tax
 
Gearing ratio (%)
Net borrowings
Total shareholders' equity – non-controlling interests + total debt (net of cash)
 
Gross margin (%)
Gross profit
Revenue
 
Leverage ratio^
Net debt^
Normalised EBITDA^

^Calculated in accordance of the Group's long-term debt agreements.

Market capitalisation
Year-end market price per share multiplied by number of shares in issue at year-end
 
Net asset value per share (cents)
Ordinary shareholders' equity
Number of shares in issue (net of treasury shares)
 
Net borrowings
Non-current borrowings + current borrowings – cash and cash equivalents
 
Net interest cover (times)
Operating profit before amortisation
Interest paid – interest received (excluding capital raising fees)
 
Normalised EBITDA
Operating profit before depreciation and amortisation adjusted for specific non-trading items as defined in the accounting policies of the Group's annual financial statements.
 
Normalised EBITDA margin (%)
Normalised EBITDA
Revenue
 
Normalised headline earnings
Normalised headline earnings are headline earnings adjusted for specific non-trading items, being transaction costs and other acquisition and disposal-related gains or losses, restructuring costs, settlement of product-related litigation costs, net monetary adjustments and currency devaluations relating to hyperinflationary economies and significant once-off tax provision charges or credits arising from the resolution of prior year matters
 
Operating cash flow per share (cents)
Cash generated from operating activities
Weighted number of shares in issue
 
Price:earnings ratio
Market price per share at year-end
Normalised headline earnings per share
 
Quick ratio
Current assets (excluding assets classified as held-for-sale) – inventories
Current liabilities (excluding liabilities associated with assets held-for-sale)
 
Return on net assets (%)
Profit before tax
Total weighted average assets – total weighted average liabilities
 
Return on ordinary shareholders' equity (%)
Profit attributable to equity holders of the parent
Weighted average ordinary shareholders' equity
 
Return on total assets (%)
Normalised EBITDA
Total weighted average assets (excluding cash and cash equivalents)
 
Revenue growth (%)
Revenue (current year) – revenue (prior year)
Revenue (Prior year)
 
Working capital as % of revenue
Inventories + trade and other receivables – trade and other payables
Annualised net revenue