Healthcare. We care. Integrated Report 2021
Healthcare. We care. Integrated Report 2021

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2021 Integrated Report

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Engaging with our stakeholders

Fostering and maintaining mutually beneficial relationships with our key stakeholders through transparent, sincere and effective engagements is an integral part of our value creation process. While we were able to establish partnerships that made it possible for us to contribute to the world's efforts to reduce the impact of COVID-19, at times the pandemic and the related lockdowns have made engaging with our stakeholders challenging. We remain intent on continually seeking ways to improve on the credibility and rapport we have already established with our stakeholders.

We define our stakeholders as the people, groups or organisations directly impacted by our activities, as well as those who could be impacted by our activities. We have a structured system of engagement in place to ensure that we provide timeous, accurate and relevant information to our stakeholder groups, and that our interaction and communication with our stakeholders is consistent.

During the year a wide range of regular, structured and ad hoc engagements took place at various levels within the organisation. To make this possible during remote working and lockdowns we frequently relied on virtual and digital means of engagement.

Our Executive management team submits quarterly stakeholder engagement reports to the Board, which detail notable engagements with the Group's key stakeholders. Any material topics or matters of concern that may arise are considered by the Board at their quarterly meetings. Management responds to material issues raised by stakeholders, as appropriate, in the ordinary course of business.

After a thorough consideration of the Group's various stakeholders we have categorised our key stakeholders as:

  • Patients, HCPs and customers
  • Governments, competition authorities and pharmaceutical regulatory bodies
  • Employees and collective labour organisations
  • Suppliers, service providers, consultants and business partners
  • Communities in which we operate
  • Contract manufacturing customers

We have also considered and self-assessed the quality of the relationships we have with these stakeholders and used the following scale as an indication of the quality of the relationship:

No existing or poor relationship

Relationship established, but work to be done to improve the quality of the relationship

Good quality, mutually beneficial relationship, with some room for improvement

Strong relationship of mutual benefit

Patients, HCPs and customers

Aspen considerations

Our products are used, prescribed or distributed by these stakeholders, and therefore, it is imperative that they are fully aware of the indications, benefits and side effects of our products. Aspen needs to have a thorough understanding of their perceptions and expectations of us and our products.

Stakeholder interests   Material matters engaged on since the previous report   Reference to value created for stakeholder
  • High quality, affordable medicines
  • Patient safety and pharmacovigilance
  • Consistent, reliable and on-time supply of products
  • Continued manufacturing capacity and ability to supply critical medicines
  • Impact of product recalls and/or any quality and/or efficacy concerns which may arise
  
  • Ensuring continued supply of critical and COVID19related medicines, considering lockdown measures and resultant sourcing and distribution challenges
  • Ongoing engagement capacity considering COVID19 challenges use of virtual engagement tools
  • Product recalls and pharmacovigilance engagements
  • Supply shortages in respect of a small number of products
  • Explaining the benefits of products in the Aspen portfolio
  • Detailing of patient benefits from new product launches
  
How we engage
  • Pharmaceutical representatives calling on HCPs and key opinion leaders to explain medicinal qualities, differentiators and patient benefits
  • Attendance at healthcare conferences both virtual and in-person
  • Dedicated pharmacovigilance and medical information communication channels, allowing patients and HCPs to enquire about product features and related safety concerns
  • Communication measures to announce product concerns or product recalls to HCPs and patients
  • Open communication with customers through commercial and technical discussions and one-on-one meetings
Link to our strategic objectives and capitals Relationship Indicator

Governments, competition authorities and pharmaceutical

Aspen considerations

Our ability to produce, market and distribute pharmaceutical products depends on the manufacturing licences, marketing authorisations and a range of other regulatory matters under the auspices of these authorities.

Stakeholder interests   Material matters engaged on since the previous report   Reference to value created for stakeholder
  • Legal and regulatory compliance
  • Support for public health initiatives
  • Affordable public health outcomes
  • Social and environmental impact of operations
  • Tax revenues and local investment
  
  • Collaboration with government officials in a number of countries to support and assist with various initiatives aimed at improving the health of patients suffering from COVID-19
  • With both the Europe and the UK pricing matters being settled, ongoing engagements with the relevant competition authorities continue in relation to the implementation of the agreed Commitments made by Aspen when concluding these matters
  • Product recalls
  • Our tax commitments
  • SED spend, contribution to healthcare enhancement and equitable access to medicines
 
How we engage
  • Audits of manufacturing sites by regulatory authorities to ensure Good Manufacturing Practice ("GMP") and regulatory compliance
  • Registration of products and maintenance of marketing authorisations through submissions and direct engagements with regulatory authorities
  • Participation in industry bodies
  • Reports and interactions aimed at confirming legislative and regulatory compliance policies and processes
  • Involvement in government programmes aimed at creating jobs and uplifting disadvantaged communities
Link to our strategic objectives and capitals Relationship Indicator

Employees and organised labour organisations

Aspen considerations

Employees play a critical role in ensuring we achieve our strategic objectives, tactical plans and operational excellence. Prospective employees are also included in this stakeholder category. We need to understand their needs, challenges and aspirations.

Stakeholder interests   Material matters engaged on since the previous report   Reference to value created for stakeholder
  • Job security, skills development and career planning
  • Equitable remuneration packages, performance incentives and benefit structures
  • Gender equality, diversity and inclusivity
  • Equitable policies, practices and procedures
  • Clearly articulated employee value proposition
  • Performance management, skills development and career planning
  • Reputation as an ethical employer
  • Employee health, safety and wellness
  • Employee bargaining and organisational rights
  • Aspen's constructive engagement with employees through organised labour organisations and forums such as works councils, bargaining units and formalised workplace engagement committees
  
  • Measures to ensure employees and especially employees within our manufacturing operations remain safe and protected from contracting COVID-19, while retaining production and distribution capacity to ensure ongoing supply of critical medicines
  • Engagement of office-based staff working from home using virtual engagement tools for most of the year
  • Employee transfers to Mylan Ireland Limited ("Mylan") as a result of the disposal of the assets of the European Thrombosis business
  • Organisational design and restructuring implemented at some businesses to ensure operational efficiencies and sustainability, resulting in job losses but impacting positively on our efficiencies and realigned structures and roles. The negative impacts of these losses were offset by proactive social plans and outplacement offerings to assist impacted employees and communities
 
How we engage
  • Direct engagements by supervisors and business management
  • Internal communication measures such as the Group intranet, announcements and digital posts
  • Conferences
  • Digital townhall meetings for businesses and the Group
  • Onboarding and internal training
  • Employee surveys
  • Meetings and other interactions with work councils, trade unions and trade union representatives
  • Employee wellness campaigns
  • Exit and stay interviews
  • Active encouragement of employees to participate in Nelson Mandela International Day ("Mandela Day")
  • Tip-offs Anonymous Whistleblowing hotline
Link to our strategic objectives and capitals Relationship Indicator

Suppliers, service providers, consultants and business partners

Aspen considerations

These stakeholders play an important role in enabling us to meet our commitments to patients, HCPs, customers and other stakeholders

Stakeholder interests   Material matters engaged on since the previous report   Reference to value created for stakeholder
  • Fair engagement terms and timely settlement
  • Ongoing communication about our expectations and service levels provided
  • Fair tender and selection processes
  
  • Supply chain constraints mainly due to COVID-19 complications
  • Suppliers' ability to ensure continuity of supply and impact on Aspen's own ability to ensure continued supply
  • Negotiation of contract terms and extensions
  
How we engage
  • Tender, procurement and "expression of interest" processes
  • One-on-one meetings to discuss service levels or other commercial aspects
  • Interactions regarding safety, health, environmental and ethical compliance
  • Visits to manufacturing sites, both virtually and physically
Link to our strategic objectives and capitals Relationship Indicator

Investors and funders

Aspen considerations

As providers of capital, these stakeholders need to be kept informed of material developments impacting the Group and our future prospects

Stakeholder interests   Material matters engaged on since the previous report   Reference to value created for stakeholder
  • Strategy and business model
  • Growth in revenue, EBITDA and return on invested capital
  • Appropriate management of capital expenditure, working capital and expenses
  • Capital allocation
  • Gearing, solvency and liquidity
  • Dividends/returns to shareholders
  • Security over assets, ethical stewardship of investments and good corporate governance
  • Implementation of business continuity measures to mitigate impact of COVID-19
  • Fair executive remuneration and incentivisation
  • Aspen's standing in terms of ESG, including progress on reducing carbon emissions and related disclosures
 
  • Strategy and medium-term prospects
  • Sterile manufacturing capacity and how this positions Aspen to manufacture sterile products, Johnson & Johnson COVID-19 vaccines and other vaccines
  • Impact of COVID-19 on commercial performance, profitability, manufacturing operations and organic growth prospects
  • Mitigation of funding and gearing risks
  • Material business disposals, including the announcement of the disposal of the European Thrombosis assets and a cautionary announcement to shareholders regarding the structured process undertaken to facilitate offers for Aspen's API business
  • Fair remuneration outcomes, with a focus on the fixed and variable incentives of executives and performance measurement in respect of these incentives
  • Engagements on ESG aspects, including carbon emissions and related disclosures
  • Resolution of pricing investigations in Europe and the United Kingdom, with both matters being settled
  • Product pipeline and development
  • Material capital investment in Aspen's manufacturing capacity to ensure cost reduction and supply consistency
  • Group senior executive succession planning
  • Negotiation and conclusion of International Finance Corporation ("IFC") loan of EUR600 million
 
How we engage
  • Dedicated face-to-face and virtual funder, investor and analyst presentations, roadshows and one-on-one meetings, including engagements regarding financial performance, ESG matters and the Group's remuneration policy and implementation report
  • Stock exchange announcements, media releases and published results
  • Annual general meeting
  • Investor relations section of the Aspen website
  • Engagements with the financial media
Link to our strategic objectives and capitals Relationship Indicator

Communities in which we operate

Aspen considerations

These stakeholders are directly impacted by our business activities, specifically from an environmental, socio-economic and employment perspective and are key to ensuring that Aspen continues to build on our Social and relationship capital, reputation and social licence to operate. By focused efforts, this engagement can contribute to our decision-making, legitimacy and competitiveness – by tapping into local knowledge.

Stakeholder interests   Material matters engaged on since the previous report   Reference to value created for stakeholder
  • Employment, education and skills-development opportunities
  • Socio-economic upliftment
  • Environmental impact in respect of carbon emissions, solid waste disposal, as well as water and effluent management
  • Ethical business conduct
  • Aspen's contribution to local and community healthcare systems
 
  • COVID-19 specific assistance in response to community requests
  • Assistance to communities following natural disasters
  • Funding of over 50 tertiary students in South Africa, to allow them to complete studies in chosen fields like engineering, pharmacy and commerce.
  • Procurement from local suppliers and service providers
  • Social unrest in the Gauteng and KwaZulu-Natal provinces in South Africa during the first part of July 2021 resulting in the destruction of many retail outlets, including community pharmacies. Aspen provided assistance to community pharmacies and other initiatives to assist affected communities in these provinces
  • Systematic reduction of the environmental risk posed by our manufacturing operations
  • Supporting education/training for HCPs in local communities
  • Initiatives to assist in building healthcare infrastructure
 
How we engage
  • Initiatives aimed at creating jobs and uplifting disadvantaged communities
  • Responsible environmental management practices
  • Working with communities to assist in building healthcare capabilities and capacities
  • Rigorous ethics and compliance management programmes
  • Participation in local, regional and international industry bodies
Link to our strategic objectives and capitals Relationship Indicator

Material contract manufacturing customers

Aspen considerations

As Aspen positions itself as a strategic partner of choice in terms of contract manufacturer in the pharmaceutical industry, it is crucial that we understand the needs and expectations of these customers.

Stakeholder interests   Material matters engaged on since the previous report   Reference to value created for stakeholder
  • Aspen's ability to ensure continuity of supply of the products we have been contracted to produce
  • Aspen's application of quality management systems and GMP, including aspects such as sourcing, employment, environmental and safety practices
  • Aspen's practices and reputation as a good corporate citizen
  • Maintenance of regulatory approvals in respect of manufacturing sites used for third party manufacturing
 
  • Ensuring continuity of contracted manufacturing supply and the resolution of supply constraints, many of which were brought about due to the impact of COVID-19
  • Partnership with Johnson & Johnson to manufacture COVID-19 vaccine at Aspen's Gqeberha site
  • Negotiations on new contracts and extension to existing contracts
  
How we engage
  • Extensive due diligence processes prior to selection and contract finalisation
  • Regular meetings with these customers
  • Periodic site inspections and audits
Link to our strategic objectives and capitals Relationship Indicator
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Integrated Report 2021