Aspen Pharmacare Hldgs

Thank you, Andani. So I'm Roy Campbell. I have just recently joined Aspen Pharmacare and Investor Relations. I'm working very closely with Suneli Siwe and the management team. It's been an exciting journey so far and I do look forward into the future and looking forward to interacting with many of you as I have done over the years. Firstly to Rendani, thank you for hosting us today at your healthcare conference and we at Aspen wish you all the best over the next couple of days. So today we are presenting first half 2026 results. Mr. Steven Saad will take us through the period under review. Sean Capisario will take us through the financial highlights. And Steven then will go over the group strategy and the outlook. We will be taking questions from both the floor and over the webcast. So please submit them if you want and please just introduce yourself as you do. And I know that we'll be seeing a number of you over the next couple of days, but please feel free to get in touch if there's anything that you want to discuss. So with that, I'm going to welcome Mr. Stephen Sider. Good morning, Stephen.

Thank you, Roy. Morning, everyone. Good to be here. Thank you. It's amazing what can change in less than a year. Sometimes you need the darkest moments to give us some proper introspection and to shape and reset where you are and where you're going to. Just to remind you in terms of our reset, there were really three areas that we looked at. The first was And the hardest thing about introspection is being honest. It's the biggest, but it doesn't work unless you're incredibly honest with yourselves. And so when we looked at our business and where we were, there were really, I think, three things that we could see here. Firstly, we have a commercial pharmaceutical business that we've run for nearly three decades, and it's a great business. And it's grown almost in every single year. And it's a relevant business because the volumes also grow. And that there is a requirement for quality medicines in emerging markets, I think, is a well-understood concept, and we're well-positioned there. And together with that, we had made big investments and have made big investments in GLP-1s, which we thought was going to be a big growth area. And that, together with a base business that we understand well, gave us a clear indication that we need to keep doing more of what we do in commercial pharma and to make sure the GLP-1s become additive. We looked at our manufacturing business and we've got great assets, but somehow we just seem to stumble across one macro issue after another. This time last year it was tariffs, tariffs, lost contract, more tariffs, tariffs go away, tariffs could come back now depending upon how things work. It's a tricky macro environment. Before that, we battled in a regulatory environment. We also battled with COVID. COVID was going to be this big, and every donor company was going to pass billions of dollars, and it came and went. And at a point, you've got to stop saying, We've been a little unlucky and our luck will change. I think you need to take matters into your own hands and it's a painful decision, but you need matters in your own hand means let's get the thing profitable and let's play what we can see in front of us. Let's just do what we can see in front of us and you'll see a bit of that in the presentation today. And then the final area was dealing with the sum of parts of Aspen. I've never really dealt in those issues with shareholders, but the disjunct between the underlying value of the assets and the share price was so apparent that I felt I had to bring it up to shareholders, which I did in the last presentation. And so we had to think about and say, well, how do we unlock this value? And to have an underpriced share and to have a whole lot of debt didn't make a whole lot of sense to us. And we're waiting for the shareholder approval, but by May we hope that this transaction will be approved. And what it does do is it pins a value at an EBITDA level on what we've been telling you that we thought the value of the shares were and the type of multiples that the business commercial farmer deserves. And it also gives us financial flexibility. It seems crazy to push through this and to push through it and carry debt, to carry debt through this whole process with an undervalued share. So I think where we get to, hopefully by the end of May, the approvals is that you have a business that has no debt. has never asked shareholders for a share, an issue, and makes a ton of profit. And I don't know how all the formulas work on returns, but to me it seems like an incredible return. There's no money asked for either funders or from your shareholders. So I'll start with that. Sorry, I'll jump around a bit and talk with the subject. And I'll go straight into the presentation. And the presentation, I'm going to cover the performance under review and just take you through our key, what we're trying to do and what came out of our previous one. We really want to sustain and accelerate our earnings growth drivers. And we believe there's some big earnings growth drivers in the business. As I've said, in commercial pharma, we've got a sustainable-based business and we've got a GLP-1 rollout in manufacturing. I remind you we've got a chemical business and a sterile business. So any profitability that you see above minus $1.7 billion is coming out of the API business. Our sterile business is losing money, and we'll talk about how we reshape it. and the contracts that are coming and how they come on and how we commercialize them. So we'll talk about that. And you will see at the end of this, we've got some very strong earnings growth momentum ahead. In terms of the other part was the sum of parts, was to unlock the sum of parts and to also now focus very strongly on free cash flow. What is free cash flow? Well, Aspen's always had very strong operating cash flows, but then we spent a lot of money on buying assets or building assets and capex, and that's impacted our free cash flows. We're in a different cycle now with Aspen. declining capital expenditure, reduced working capital as we've built all of these assets, and we've got earnings, increased earnings. And so Sean will take you through the triggers for free cash flow. In terms of sum of parts, as I said to you at the beginning, we want to show you value. We want to unlock value for shareholders. We're absolutely clear that even at current valuations, the business is not getting the valuations it could. And I understand this confusion because if you make... 100 in one division and minus 10 in another, then you place a multiple on the 90. In our opinion, the minus 10 is not something that should have a negative value attached to it. And we also think it underappreciates the value of the branded emerging markets. And you'll see the relative growth of our emerging markets relative to our developed markets, for example, like Australia. For the period under review, just to remind you, last year we had really good earnings momentum in commercial farming. We had double-digit growth in constant currency, and we expect to sustain that growth into this period. And for this year, you'll see that the GLP-1s, the growth is now becoming evident in our numbers, and it will It should be increasingly, it become an increasing share of the Aspen business from here on in. We've managed to get expanded indications on Munjoro and the Quickpen. So those were quite big add-ons to the product, which have accelerated the growth of the product in the South African market. A reshape is always difficult, but we've done 90% of the reshape. It's never certain until it's done, but you can see from the restructuring expenses in this half that the majority of it's done. We started the insulin contract in South Africa, and we expect the approval from the regulator in March, but our contract is not with the regulator. It's with the buyer of the product, the owner of the IP, and so our contract with them has started. We had the contract dispute. I'm happy to say it's closed, and it really is the last period it will negatively impact earnings, and Sean will take you through the swing around in earnings in H2 as a result of having this out of the system. The RAND's been incredibly strong from an Aspen perspective in RAND results. The relative performance of the RAND against our basket of currencies has quite a big impact on how we perform. I mean, assuming it trips as much as it has in the past. And the RAND, you know, even if I go back five years, it's It was stronger today against Australian dollar than it was in the Euro than it was five years ago. So the RAND has been really, really strong for us and it obviously impacts our results. And Sean will take you through the free cash flows. So that's all I've got to say about performance for now. I'll come back and talk about strategy. But I'm going to get Sean up here to take you through the next part of the presentation, the financial portion. Welcome, Sean.

Thank you, Stephen. So nice to speak to real people. The last presentation, we spoke to a screen and a couple of people. We had to pay them to come and watch us, but they're happily obliged. But nice to see you all, and thank you for coming. Really appreciate the efforts to be alive, and also welcome to all the people online. We are very pleased to take you through these financial highlights, and as Aspen, we remain absolutely focused on executing on those strategic priorities that Stephen spoke about at the start. and with a razor focus on unlocking the sum of the parts value that underpins our investment case. So those are real drivers going forward. If we then get to financial highlights, in this first chart I've got three bars, the one talking to revenue, normalised EBITDA, and on the far right, normalised headline earnings. So if I start with revenue, we ended the period with revenue of around 21 billion rand, 4% down relative to the prior year. If you sort of look, and we'll cover the detail a little bit later, but commercial pharma had solid growth for this half, and the decline in the revenue was driven by the manufacturing segment with the loss of the MRNA contract that Stephen spoke about earlier. If we then look fast forward to the middle graph, which is our normalised EBITDA, we came in there at just over 5 billion rand, a 13% drop versus last year's 5.8 billion rand. Again, looking under the hood, commercial farming had positive double-digit EBITDA growth, and that decline was driven by the decline in the manufacturing segment. And interestingly, I think you might have read it in our commentary, if you take that 5.8 billion from last year, the full year EBITDA last year was 9.6, so we did 3.8 billion in the second half. And so that's really underpinning our guidance for a strong second half for H226 compared to the 3.8, and we've done 5.1 compared to the 3.8 in H2 2025. So we're very confident of driving a strong second-half performance in our business, and so we're very happy that we have a very positive offset in H2 and end the year with positive growth in EBITDA and all the other metrics. Looking to the right, on our normalised headline earnings, we ended the half year at 5.75, 21% down on the prior year, 7.24%. I sound like a stuck record, but again, the main driver of this was the loss of the contract. You'll also want to know why. Why are we sitting at minus 21% here and 13% on EBITDA? Why is the gap bigger? Well, this is really a mathematical problem because if you look at our depreciation, our amortization, our finance costs, our tax costs, they're all relatively flat. to the prior year. So effectively your EBITDA gap in absolute terms falls all the way through down to earnings and obviously has a bigger impact on percentage decline when you look at it on a percentage of earnings. The positive to that is obviously in the second half of the year when we have a positive delta to EBITDA, which will then translate to an expected full year delta positive to EBITDA, you're going to have the reverse effect where you're going to see Good EBITDA growth, but even stronger, and we have guided double-digit normalised earnings growth because of the fact that all of the other metrics below EBITDA are relatively flat or lower than the prior year. This is probably my favourite slide, and I know it's something that we've been putting a lot of focus on. We've had a lot of years of investment, and I think we're now in a cycle of generating strong positive free cash flow. So if we look At the grey shaded bars on the left, my left, that should be your left too, of the screen, I'll just explain the graph. But the light blue one is the cash that we generate from operations. The dark blue is our capex spend. And the other different colour blue is the net, is the residual balance, which is our free cash flow. So if we look to the first bars there of financial year 25, we generated just over R5 billion of cash from operations, but you can see we spent just under R5 billion on CapEx and very little free cash flow, about R166 million of free cash flow in FY25. If you go back to the half year last year when we were talking free cash flow, we generated $1.8 billion of cash from operations, but we spent $2.6. So we actually had a negative $0.8 billion of free cash flow last year. Fast forwarding to this year, we've generated a very, very strong cash flow from operations of $3.6 billion. You can see quite a significant increase. of that 3.6 when you compare it to the 1.8. And that's notwithstanding that EBITDA is 13% lower than last year. We've generated more cash. So cash has really been a key driver and focus for us. What are the key things underpinning that cash growth? It's obviously a much lower investment in working capital. We've also reduced our finance costs in cash terms and we've also managed our tax very, very closely and managed our provisional and tax payments to optimise those as well in compliance with law. So we take all of those together, that's what's driven the big increase in the cash flow from operations. On top of that, we've spent R1 billion less in CapEx. Last year, we spent R2.6 in the half, down to R1.6 this half. So if you take the combination of those two, we end up generating just under R2 billion of free cash flow for the half. So a really good achievement, and I know that's something that everybody's been looking for Aspen to start driving. What are the benefits of driving the strong free cash flow? If you go to the right and look at our net debt, and we're also being honest with ourselves here, we've put the net debt there in accounting terms, and we've also put the constant exchange rate net debt so that we don't take the credit for exchange rate movements. But if you look at the net debt, we ended the half year at $28.6 billion. That's down from $31.2 billion in June 2025. If you had to look at the June 2025 in CEO, it's around $30 billion. So even with the exchange rate out, we've generated a reduction in debt from the $30 down to the $28.6. And that also includes having funded a dividend of $0.9 billion in this half as well. So that's a really good achievement for us. That culminated us in ending with a leverage ratio of 3.4 times, and so slightly elevated from FY25. I've obviously got some slides later on to talk about the APAC divestment, but you won't see much in this bar when we talk to our full year results, assuming that we get completion of the APAC divestment. So this net debt will be pretty much eliminated, and we'll certainly talk about it in later slides. If I flick to the next slide, I've got the light blue shaded area on the left is our commercial farmer business, and the gray shaded area is our manufacturing business. So if we look to the left first, commercial farmer business. I've got revenue bars and EBITDA bars comparing to the prior half. And I'm going to talk CER in this chart because CER is what we measure ourselves on. And so if we look at revenue, a solid 4% growth in revenue for commercial farmer, constant exchange rate. If you then look to the right, that 4% revenue growth translates to an 11% growth in constant exchange rate EBITDA, growing up to $4.8 billion. A key driver of that is, and I think we spoke about this in our previous results, our reshape business in China, where if you remember we had quite a lot of expenses when we did the combination of the Sandos and the Aspen business, and we did guide that we went through a large reshaping process in China last year, and this is the year we get the benefit of that in both the first half and the second half. So that expense saving is a big driver of the EBITDA growth. And underlying then, I know we take it for granted at Aspen, but it's a real achievement, is our gross profit margins in our commercial farmers remain very, very stable. So with the leverage of expense savings and a stable gross margin, you get the increase in your EBITDA growth. And you can see that our EBITDA margin has gone from 28.3, which is in the shaded block there on the left, increasing to a healthy 29.2% EBITDA to sales ratio for this half, and we are very comfortable that's a very stable position that we can continue to drive going forward. On the right-hand side, on the manufacturing, turnovers down 26% in CER and EBITDA down 85%. Again, all impacted by the loss of the MRNA contract. If you look at the EBITDA, we ended the last year off at just under $1.3 billion, and this year we're coming in at $0.2 billion. If you remember last year, we had the benefit of the contract was around $1.5 billion, and we also then got the settlement that Stephen spoke about in his slide of about $500. If you net those two off, it's around a billion drop, and that's pretty much what you're seeing in the reduction in our EBITDA in this half one. And just bearing in mind that this is the last half of the impact of this contract, and we will see positive growth going forward. Looking to our group revenue, just to unpack some of the elements there. So this chart, what it does is it shows our commercial farmer revenue and our manufacturing revenue and then our group revenue, comparing the half 126 to the half 125. So if I look at the commercial farmer first, you can see, and I think we've covered this in the previous slide, a nice growth of 4%. in the green block, and then underneath that, those are all three of our segments, prescription, OTC, and injectables. You can see all in constant exchange rate, all showing positive growth. Obviously, the standout performer there is the injectables at 7%, and that is driven by the very strong demand that we've had for Monjaro, and the other OTCs showing a very healthy growth, and prescription also coming in there with 2% growth. So overall, we're very comfortable with the commercial farmer growth for the half. I did put FYI, if you take the Asia-Pacific region out of our sales growth, and you just look at our business, without APAC, that growth goes from 4% to 5%, because APAC had a slightly negative revenue growth in the first half of around 2%, I think. Manufacturing, again, they're down 26%, which then impacts the group revenue going down by 4%, and that's all impacted and affected by the loss of that contract in this half. I think then moving on to, I'll just explain this table because it is quite a busy table. This is our group EBITDA slide. So in the dark blue we're comparing, we're showing our income statement of revenue and gross profit right down to normalised EBITDA and we're comparing half 126 to half 125 and we've got the ratios to revenue next to each of those blocks and then we talk to the percentage reported in constant exchange rate. On the far right, there's a separate block there, and that's the FY25 full year numbers. And you'll see, I just wanted to put those down so that you can then compare H125 to FY25, and you can quite easily see that's the $3.8 billion that we generated last year in the second half, and gives you a sense of what growth we're going to drive in our second half of FY26. So talking to the revenue first, I think we've covered that, a 4% decline in revenue driven by the manufacturing, offsetting the commercial farmer. Coming down to gross profit margin, you'll see our gross profit margin for the group has dropped from 47.6% to 45.4%, a drop of 7% in constant exchange rate. Again, if you look at the underlying gross margins, commercial pharma has stayed very steady at a gross margin of 58.5%, and that dilution in the group gross margin is driven predominantly by manufacturing. Pleasingly, if we go down to the expense level, we ended the half with expenses of just under $5.3 billion. Last year, our expense base was just around $5.4, so a 2% reduction in expenses. I just wanted to point that expenses for Aspen, these are mainly for our commercial farmer business because most of your manufacturing expenses sit in cost of sales, not in expenses. So that drop of 2% there is what's driving the commercial farmer EBITDA margin growth. Obviously, when you put the total business together, because of the manufacturing revenue decline, the group expense ratio is elevated up a bit from 24.5 to 25, but that's just because of the manufacturing revenue decline. Then looking at normalized EBITDA, there we bended the half. It's just under 5.1 billion, 505.3 million, an EBITDA percentage of 24%. That's down on last year's EBITDA percentage of 26.5 and last year's EBITDA of 5.8 billion. If we look at the sort of moving parts there again, a commercial farmer, if you remember from the very, that slide I took you through on commercial farmer, they've had a very good increase in EBITDA margin and ending at 29.2%. And as I've said, we remain confident for that going forward. And the drop in the EBITDA margin is driven by the drop in the manufacturing EBITDA What I'd like to alert you to is if you look at the far right and you look at FY25 full year EBITDA margin, last year we ended there at 22%. So we're already above last year's full year EBITDA margin with more growth to come in that margin in the second half as manufacturing lifts in the second half and commercial pharma continues to perform consistently. So those are all the metrics that underpin our guidance for strong double digit EBITDA growth in H2 relative to the prior year half. Just moving to a different topic now, and I'm talking now around tax rates. You might say, why do I talk about tax rates? Well, for Aspen Tax, we respect tax because tax is the only expense that falls all the way through down to earnings. So if you don't manage your tax... It affects not just your pre-tax number, it affects your whole income statement. So it's not like an operating expense where you get a tax shield. Tax falls all the way through. So we've paid a lot of respect and we watch it very carefully in making sure we're compliant, but at the same time making sure we manage it in the most optimal way. What this graph does below, it looks at our normalised effective group tax rates from FY24 going through to FY25 and then H126. You'll note, and I'll take you through the two different bars in a minute, but you'll note there is quite a steep increase from 24 to 25, and that is a result of the global minimum tax legislation that we took you through in our previous results, and obviously that's now embedded in our base tax rates. So that's the driver of tax increases from 24 to 25. What we've also done in this chart is we've shown you the tax rate for total operations, which is this sort of the 22% and the 22.2% for H126s, So you can see our tax rate is relatively constant this half versus prior year. And then what we've also done is stripped out the APAC business and what is our continuing operations tax rate, and you'll see that jumps up to 22.7 in 2025 and 22.8. So again, stable year on year, but a slight uptick, and that's sort of where we think our tax rate will stabilize going forward, obviously dependent on profit mix. and how this global minimum tax is actually implemented when it gets to paying out the actual tax. I think that's all on the tax rate. I think then I'd like to just talk to you about the Aspen APAC divestment and an update there. Just a health warning that these dates I've put you are indicative only, but they are our best guess on what we know at the moment, and I think these dates are pretty consistent to what we presented when we had our call with all of you I think in, sure, it feels like a year ago, but I think it was in January sometime. And so, yeah, based on all our timelines, we expect to publish a circular to shareholders by the, I don't know, before 20th of March, which means then we'll have the shareholder vote on it before 22 April. And based on the contract, it will give us a completion date for the contract of end of May, and that's when we'll get the cash, the initial proceeds from this transaction. And then there will be a two- or three-month period where we will have some true-ups of working capital and all the other adjustments. But the big cash flows will happen at the end of May based on these timelines. Looking, for those of you who have got a bit of an accounting background, affiliation, the APEC divestment meets what we call IFRS 5 accounting rules. What does IFRS 5 say? It says if your business segment is material, and it has a high probability of being sold, you have to classify it as a discontinued operation. So when you look at our results, you'll see that we've got continued and discontinued split all over the place. So it's quite hard, I think, when you look at those results with a cold eye. And so you'll notice in our commentary, we've put a total operations table there just to help you sort of navigate the old, let's call it the total operations numbers to the continuing and discontinued operations. I think the important point here is that the balance sheet has been stripped down. So when you look at the balance sheet for Aspen for the half, you're going to see intellectual property going down quite heavily, and that's probably the main one going down because the APAC business was quite rich in intellectual property value. And all of the APAC value is now sitting in one line called assets held for sale, and the net book value sitting there is $21.8 billion, just under $22 billion. From a financial effects perspective, the gross consideration for this deal is 237 million Aussie dollars. In December, we got it in rands at to be 26, just under 26.5 billion rand. That was at an exchange rate of, I think, 11.05 to the Aussie dollar. As we sit now, if you look at today's exchange rate, we could be well north of 27 billion plus. So it depends on where exchange rates go. There could be a benefit from exchange rates, but we'll wait and see. From a net proceeds perspective, we're expecting net proceeds of over $25 billion. That's based on the $26.5 billion, so if we get more in range, then the net proceeds will also go up. Those proceeds will be used primarily to reduce debt. And for those of you that want to try and work out what the profit on sale is, I'll just give you one number, but the debt that's embedded in the APAC business is around $1.2 billion. You've got to subtract that off your $25 billion before you compare that to your net asset value if you want to work out a profit on sale. which we will be reporting in the second half of this year should this transaction go through. But it will be somewhere around 1.8 to 2 billion. I think that's the range that we would expect to come into our earnings per share in the second half. Impact from an income statement perspective. After-tax profits, the loss that we expect from APEC will be around 1.75 billion rand of after-tax profits. And that's a number you'll see in the results booklet for the 12 months ending June 25. So we've based this on June 25 numbers. If you take out, obviously there's an interest saving that's embedded or interest cost that's embedded in the APAC business itself. If you exclude that, the interest saving for the rest of the Aspen group, based on the reduction of debt, is around $1.2 billion pre-tax. which is around 0.9 billion after-tax. And if you net that off the 1.75, you get to about 0.85 billion of after-tax impact net of interest saving for the group, which is an earnings of circa 185 cents. Stephen will talk you through the historic profile of the APIC business and also will talk you through how we plan to recover our profit gap over the next two years. So I thought it would be quite interesting to show you this now and then you can see the plan how we're going to tackle that gap in the next period. I think it will be quite good for you to all see that. I think my last slide is just on ESG. It's something that we always focus on. It's part of our DNA, and we're passionate about it. And so we've got, if you remember, we've got our 16 goals under these four pillars that we published in our integrated report. And the four pillars is to remind you of patience, our people, society, and the environment. So on the patient side, that's probably our key driver or metric for Aspen from a DNA perspective, and that's to increase access to critical medicines in emerging markets. And I'm pleased to say at this stage we've had an 8% increase in volumes versus FY24 of critical medicines. Some of the call-outs here, obviously we've made some good progress in the insulin manufacture that Stephen spoke about earlier on. We're also making good progress on those aspirin serum vaccines, which I think Stephen will give you an update on as well. And our generic GLP-1 strategy will also help us in this patient access bucket. From a people perspective, our goal by 2030 is to get to equal gender balance. And I'm pleased to say that as we sit now relative to 2020, we're at 32% of women in top leadership positions, and that's an increase from 19% in FY20. So good progress there. We've still got to get to 50% by 2030, but we're well on track. From a societal perspective, there our focus is on group ethics and compliance, and our deliverable there was to complete that program by the end of FY25, and we've successfully done that and completed that 100%. And then very importantly on the environment, our target there is to reduce carbon emissions scope 1 and 2 by 50% by 2030. And if you look at the grey block, we're around 24% reduction at this stage relative to FY 2020 as our baseline. Some call-outs there, we've increased our renewable energy usage to 19%, with eight manufacturing facilities now using solar panels to supplement the energy. We also started to introduce water stewardship plans, and we started our facility in Cape Town. And with our partner, IFC, which is one of our development funding institutions, they've got expertise in this area, and together we've developed a decarbonisation roadmap project at our Cobef facility that we'll then use as a blueprint to drive down our carbon emission going forward. So I think some very good progress on our ESG. And on that note, I'd like to hand back to Stephen to take you through the more exciting part of the presentation, now that we've dealt with all the numbers. Thank you, Stephen.

Thank you. Thank you, Sean. Thanks. Well done, Sean. He's showing a black belt in budgetary control, Sean. Well done. That's impressive. Keep your hands on the cash, Sean. Good. I always say this. You've got to have good partners in business. You've got people that can make money, but more important are people that can keep money. So let's deal a little bit with the group strategy here. The group strategy, my heads up to you is have a look very carefully at what we see as very strong organic earnings growth and its capital light. We've spent the capital, so just bear that in mind when considering how we look at the business going forward. So when we look at commercial pharma, this is our base business. It's an army of people out in the fields selling product. And we've got great dynamics in our market because we're particularly strong in emerging markets. And no matter how they perform, there's always a growing middle class. And, you know, often don't have a single player. So if you're going to develop markets, the government may pay for all your medicines, for example. Here people have to pay out of pocket. They try and buy the best medicine they can. It's affordably, so it's got to be affordable and it's got to have quality. And that's where we've focused our businesses in terms of branding and quality. And we're in that sweet spot of continuing volume growth across our markets. We've had risks in our base business. We've had risks over the years. We started in Venezuela. We've had Russia and Ukraine. And we've had a VBP issue in China. We've managed them all, and you'll see from what Sean showed you earlier, we've successfully managed the challenges we've had in China. So our base business... is solid. There's no road bumps ahead. And it continues to perform. And once again, we're heading for another year of double-digit growth in EBITDA. What we're also going to show you now is, I know that a lot of people question GLP-1s, will it work, won't it work, etc. What you're going to start to see is evidence of that growth in these numbers too. When we talk, I'm going to go straight into GLP-1s and our strategy. When we talk, we're going to really talk about Two key areas and obviously an outlook. One is the Manjaro performance in South Africa and its rollout into sub-Saharan Africa. Two, the semaglutide. Semaglutide is the active ingredient in Zempek and Wagovi. It's a generic opportunity as we see it. And then the outlook for GLP-1s. What you see now on this slide is the GLP-1 market in South Africa, and its market value is currently at about $2.2 billion. Now that represents about a tripling. That market's tripled in 18 months. It's a great category to be in. There's huge unmet demand and it's a business that Manjaro in particular has performed, has been a key driver in the growth. We've gone from 21% of the market to 52%. A lot of that's been driven by the new indications, and it will be the quickest brand to reach a billion rand in the South African market. I know I said it was going to get to a billion, and I hope to get to a billion next financial year. We're going to get to it this financial year. And we expect to achieve over 1.3 billion. It's quite hard to pin the number here because every time you pin a number, it goes a little bit higher and higher. But it definitely won't be less than 1.3 billion rand of sales in this period. The registration of the quick pen, which was the device, which moved from a vial, gave us an opportunity now to register the product across sub-Saharan Africa. And we expect registrations from as early as this calendar year. The process can be a little quick in some of the African territories. And so we think 26, 27 will be period of registration of products across sub-Saharan Africa, and we'll get to understand the dynamics of that market as we roll it out. The semi-glutide opportunity, semi-glutide is effectively a generic launch. Canada is the first market to go patent of size. And we are definitely in the shaker for an early launch here. What do we say in early launch? We believe that the first products coming to market will be in Q2, calendar year Q2. May, June might be the earliest product you could get there. That's our best estimate. And we're hoping to be in the sort of mix towards the end of Q2, Q3 to get registration. There's a process to bringing commercialising a product, which means you get a number that you've got to try and print onto your products quickly enough and you've got to get... You've got to get your product approved in various provinces. But I think that we're comfortable that we've got a really good shot at being part of what in the generic world is called market formation. So that's when the market takes shape and those people with early entrance have a larger share to start with. And we think we're up there with front runners. Very proud of that opportunity, proud of our teams for getting us there. But probably more important for Aspen is in many of our emerging markets, when you want to register a product, they will say to you, for example, in the Latin American countries, what regulated markets have you got that we can reference your product to? So getting this registration is great for us and great to have the opportunity in Canada, but also becomes a reference market for us because they want to see that a stringent regulator has approved it and then they can reference it. So it's very important for us because obviously emerging markets are key for us. So we also would... It's a sort of a bipolar... patent expiry. In general terms, emerging markets start expiring from this year and carry on through to 27, end of 27, 28, and regulated markets tend to start in 2030. So it's going to be very important, the sort of scrap in emerging markets, and I think Aspen are really up for it in our key markets. And we're in a good position to be rolling out across those markets, particularly with our presence across many of those markets. Sorry, did I get something out there? In terms of the sort of outlook for ourselves, well, we've got the Manjaro rollout in South Africa and hopefully the initiation across sub-Saharan Africa. The demand remains strong. It's growing every month. So it's not a – it's growing every month. We've managed to get a fair bit of stock in, but it is something that we're sort of monitoring almost daily, weekly, trying to understand the offtakes. And I've discussed the semi-glutide opportunity there. But we're very pleased to have a partner like Eli Lilly in terms of pipeline and product. So Eli Lilly, you know, we've partnered with many multinationals, but I don't think we've had one with such a strong base product and pipeline of products. And it's a great position to be in. Now, that covered our commercial farmer business. I want to go into manufacturing now. Now, in manufacturing, just to repeat, if you see that we've made $700 million of profit in manufacturing, understand that we've made a billion somewhere else and we've lost $1.7 billion in steriles because to get this to break even profitability, we need to cover for the billion rand that we lost in the contract as a first step. So when we give you guidance, which we will later, we'll say to you, our profitability in manufacturing will be the same as last year or in line with last year. That means we've recovered a billion rand in this year to cover for the contract loss. As I said when I opened, we modified our strategy. We modified our strategy to simply address all the issues that we can control. In a world of moving macro environment, I mean, as we sit today, I don't know how things move around us. We wanted to be in control of as many levers as we could be in control, and we had to address our cost base, and we had to look, and we have to commercialize those contracts. We have absolute certainty on over. The reshaping is largely complete. You will see the benefits in H2. and you'll see the full benefit in financial year 27. So, yes, we've had a contract settlement in this period, but it's more than replaced by the annualized savings in financial year 27, and you'll see it's also covered in the second half of this year. Hard processes are really not easy, painful for an organisation, but in the environment we find ourselves in, absolutely necessary and gives you a lot more control over everything that we do. So, having dealt with that, let's talk a little bit about contract commercialization. So, in terms of contract commercialization, the insulin contract is very material for our South African business. We've got one line. We started it. We ramp up that line, so it will ramp up over the period. We'll have a full impact into financial year 27. We also, we've now moved, we're moving on to a second line towards the end of this year and the second line will come on stream for financial year 27 and we're hoping to build off that base. The facility in France was particularly impacted by tariffs because The Trump administration was saying, why are you making anything in Europe? Why don't you make it? You can't send stuff from Europe to the US. You must make here. And a very different approach to vaccines and vaccine registrations impacted that site. Now, we have something called RFQs, which are basically requests for quotes. People come to you and say, can you make this product for us? In that tricky period, when we had absolute uncertainty, we had one request the whole year, which was, and so that's why I said to you, I can't give you any guidance here, I don't know where this is going, etc. In the short period we've had in this year, we've already had six. So the market's turning a bit for us. We've seen green shoots there, and happy to say that we've secured additional volumes, which would give us about 300 million rand more EBITDA in financial year 27. So it's a great facility for those of you that visited. It's a great facility, and it's well-positioned, and I'm happy to see some momentum there. Pediatric vaccines, quite a frustrating process in terms of a regulatory and a regulatory environment. Environments are very tricky in terms of, you know, people are losing funding like WHO, so the US pulls funding and So it's not always easy to get the timing and the pace right on these. But I'm happy to report there's a process here where you need to first get your local country, SAPRA, registration, and then you go to the WHO. We have two products registered with SAPRA. They'll go to the WHO. PQ is pre-qualifying. It means you go in. Once they pre-qualify you, you can start tendering. We've got two other products in with the regulators, and we expect registration during this calendar year, so over the next nine or ten months or so. I think the one worth discussing today is HEXA. Hexa, by implication, has got six different deals with whooping cough and polio. It's a very broad vaccine. Six different ingredients to deal with it. And I'm happy to say that the WHO and SAPRA, instead of treating us sequentially on this product, in other words, SAPRA first, then WHO, they're looking at it in parallel. If it works as they propose, we should get registration at a similar time for both. And that would be great for Aspen because the tender cycle for HEXA starts in calendar year 27. So we are trying to get this product registered with both SAPRA and pre-qualified at WHO in this year to be able to participate in a tender cycle in financial year 27. So It's been a lot longer process than was initially intimated to us, and there was real urgency around vaccines at a point, particularly around COVID, but that urgency seems to have diminished together with funding for a lot of these type of institutions. But we are finally seeing the wheels turning, and hopefully we'll be talking about Hexit here in the not-too-distant future. We've spoken lots of numbers, lots of things, and I think sometimes it's easier just to put it on a very simple table to see where you are and to talk about what we're trying to achieve as a group. So what you'll see in the red there is we've lost a contract. It cost us a billion. So let's start at the start, maybe. We have 9.6 billion rand. of EBITDA in financial year 25, and we lost a billion in a contract, and we divest a business in a region which has 2.6 billion rand of EBITDA. So you start with your 9.6 billion, and now you strip down to 6 billion, being the 1 billion minus 1 billion minus 2.6. So that's what the red column says. At the bottom it says we are 3.6 billion down off our base. Our intention is to restore this business to its $9.6 billion of EBITDA by financial year 27. So that means we've got to make back $3.6 billion. What have we got? We have 9.6, we lose 3.6, we've got 6 billion. To get to 9.6 billion, we need 60% growth, straight EBITDA growth roughly. Of course, in our business, exchange rates are impactful. They're not going to be that impactful on the absolute picture. So our idea is to try and get as much of that back as we can get over the next period. So how does that work? So in 2026, we will guide you that we expect our manufacturing revenue to be stable, and that means we've made back the billion rand we've lost in the contract. That's what we have to do to get that back. We will guide you that commercial pharma has double-digit growth. And remember now it's double digit growth for business outside of APAC, APAC being the divested business. And so you can double up what you see in the first half and you get to see where you are and you reasonably could have a number of 0.7 billion. Means we're hoping to get back 1.7 of that in this financial year, which then leaves us a balance of 1.9 billion for next year. We've guided you that steriles will get to EBITDA break-even or better. And so by deduction, you've got $0.7 billion more in 2027. And that's driven by one annualized savings, but two new contracts. Commercial pharma is simply – and then so now you've got a balance, and your balance is actually the $1.2 billion for 2027 that we now have to make up. So how are we going to make up $1.2 billion? How much of the one point – where will the components of the $1.2 billion come from? So we start with commercial pharmaceuticals. We've got base organic growth, and we expect GLP-1 growth. So we've got South Africa, which is already tracking at a higher cadence in the last month of the month versus the first month, and we are hopeful for some launches in sub-Saharan Africa, and we're hopeful for a generic launch, particularly in Canada, should be the most impactful if achieved in financial year 2017. In addition, what is new to us and has recently been completed is we also know we've got an extra 300 million rand of EBITDA in our French facility. So hopefully, between all of those, we capture a good portion of the 1.2 billion. But it will give you a sense of where we're tracking to get you, whatever number we get you. Remember, this excludes anything out of the divested businesses. You will have a business worth... EBITDA, very high EBITDA, hopefully approaching $9.6 billion, and you'll have no debt and probably have cash. So that's the goal for us as a business, but I think it's just simple. If you get lots of numbers thrown at you, a simple table can assist with that. And so that's our goal. That's a push for earnings and earnings growth. Now I want to come to the sum of parts and the free cash flows. This unlock, and obviously it's all dependent on approval, so this divestment gives us a lot of balance sheet flexibility, and we continue, the base business will continue to drive cash and profitability. Why did we do it? Well, one, I gave you reasons up front, but it was a compelling valuation, and it leaves us with negligible debt, and consequently a lot of balance sheet flexibility. The remaining part of the business is focused on our faster-growing emerging markets. And when you look at the growth engines I've told you we've spoken about, what drives our earnings growth will be manufacturing, which is not in the region, and GLP-1 rollout. are not in this region initially either because the biggest markets are Australia and the patent sometime in the 2030s. So we have our growth engines of a smaller base profitability. And if you take the multiple that we got here, which is over 11 times EBITDA, if you take that multiple and you put it across commercial pharmaceuticals, then it's way beyond our total market capitalization. And For that reason, we believe that the commercial farm is undervalued. Our faster-growing businesses must surely carry a minimum EBITDA of this one. Moving steriles to a positive... EBITDA, when we look at Aspen and people, and you see, and I say, we assign, we ascribe an EBITDA to Aspen multiple of seven. And as I told you earlier, what that does is it means that there's a negative applied to our sterile business. Now, we completely disagree with that. Our sterile business is very valuable. Unbelievable assets, and they're valuable. It's not if, but when. But what we do is we take the heat out of it by getting them profitable. But we don't agree. And everyone's entitled to their own value. I'm not telling you how to value. I'm just telling you we as a management team how we look at it. But while there's at this junk in value, we have to continue to look for opportunities. to further unlock value. Doesn't make sense for shareholders if the value remains trapped. So we will continue to look for opportunities to unlock value in the business. What drives free cash flow and improving free cash flow is one, you've got increased earnings coming forward out of organic earnings. You've got declining capex, which Sean has shown you, and that decline will maintain. And our growth drivers, the GLP-1s and our manufacturing sterile facilities don't come with extra... We've made these investments in the past, and so that doesn't drive... further capex needed for the growth. And as you've seen, there's reduced capital, working capital investment. This is interesting because we want to show you the consequences of what we've divested. Much of this will be in a circular when it comes out, if not all of this. But here's the operational impact of the divestment of APEC. As I said, it's material. The revenues are about $8 billion, and the EBITDA from 2023 was about $3 billion. It's declined to about $2.6 billion in 2025, and for all intents and purposes this year it would be about $2.3 billion. Some of that's currency movements in there. The Australian currency has not been strong over that period. And the reason I give you 2.3 for this year is that in H1, which we've had, H1 in the region is stronger than H2. Almost all that profit's in commercial pharma, and you'll see it's got good cash flows, but that cash received will be offset to go into outstanding debt. What is interesting probably, just to give you a sense of the relative growth of some of the emerging markets to this region, is when you look at the growth rate percentages, and that table at the sort of bottom there, you'll see We reported a 6% growth in EBITDA in reported terms, so that's with currency all in. Look at what we achieved operationally. It was 11%. If we take this region out, which is what you'll see at the end of this period, the growth jumps from reported from 6% to 13%, and in constant exchange rate, it goes from 11% to 16%. So if we were showing you these accounts with Australia divested, you would have seen reported earnings growth of 13% growing at a constant exchange rate of 16%. So it is material, generates a lot of cash, et cetera, but clearly, as you'll see, was a bit dilutive to the overall growth of the business. So now we get to guidance. Guidance, we had a lot of debates about guidance. Whole business, continuing operations, discontinuing. So we're trying to make it as sort of understandable as we could. So if we talk about guidance here, 26, we expect the commercial farmer business to retain the single-digit growth in revenue mid-single and the double-digit constant exchange or EBITDA growth. And we expect higher margins to persist and will be higher than prior year commercial farmer. As I discussed earlier, manufacturing, we expect to be in line with the prior year, which means we have to recoup to achieve this. We have to recoup the billion rent contribution. And we expect to achieve that, obviously, through the operational improvements across the business. Okay. We are absolutely focused on driving a positive financial 27 to have our sterile business into a positive EBITDA and cash flows, and a lot of that is the annualized savings, insulin ramp-up, and now we've got these increased volumes coming through NDB as well. What does all of that turn into in terms of financial guidance? We expect double-digit growth in normalised HEPs, which Sean has taken you through. We expect EBITDA to be double, at least double what we achieved in the first half. And that's driven, as Sean showed you, by a much stronger second half of this year versus the prior year. We have stronger free cash flows. Our operating cash flows will exceed 100%, and traditionally we've done that for decades. And there's CapEx reduction, which Sean showed you on his slide, which would continue, and the low working capital investments. Tax is relatively stable, and with this transition closed, we would have extinguished our debt in total, or nearly all of the debts in total. And of course, we cannot tell you about currencies. Two days ago, we would have told you a different story about the dollar currency to today. But, you know, while there are missiles flying, we are a global business and we are very impacted by global events, as we've seen over the years. And with that, I think that's my last slide. Yeah, that is my last slide. So that's our story. So thank you. Thank you for listening and I appreciate it. And hopefully there's a fair bit of clarity in what we're doing. But if there's one thing you get out, I hope you get out of this, is that we've taken firm control over the controllables and tried to decrease uncontrollables in the business. Thanks Ray.

Thank you Stephen, thank you Sean. Thank you. We can take some questions from the floor and then we'll go to the webcast.

Thanks. Morning, Sean and Stephen. Thank you for the presentation. And just, sorry, I'm Loretta Chessie from Ashburton Investments. Just a question on the commercial farmer business. The revenue was obviously quite positively impacted by the GLP-1 commercialization in the South African market. Can you give us a sense of what that growth was, X that number, And then maybe further to that, there is talk, as you say, of generics starting to come into emerging markets in 2026 and 2027. How do you see that impacting your GLP-1's business in SA, provided the regulatory authority actually gets around to approving these guys?

So the GLP-1 situation in South Africa, it's quite interesting and interesting dynamic because we will have a generic semaglutide in the market as well. The positioning... So the Munjora patents are a long, long way away. So Munjora is the most expensive product in the market, much more expensive than the other products, and people buy Munjora. The generics come against the second and third products, Zempek and Wagovi, and they are expected to impact those products. Anybody who wanted to buy a cheaper product would not be buying Manjaro. They'd buy one of the other branded products because they're cheaper. I firmly believe that the lower-priced products will actually bring in a completely different set of uses. There are a whole lot of people that can't spend three grand, five grand, six grand a month. They just can't in the South African environment. In any environment. And so you are going to get very different users. And, I mean, if we get it as affordable as we hope to, you know, this could be something that gets even into the public sector of South Africa. So we're really pushing hard on that affordability, but I actually believe there's a completely different patient profile for those two products. Okay. Yes. I listened to you, Mohamed. I heard you last time. Oh, he gave me a heart that he won on one last time. I hope you're pleased.

This is Mohamed from Mianzo Asset Management. There's a question in the balance sheet which didn't come up on the slides. You indicated the NAV for the APAC business was $21 billion and your group equity, your group NAV is $81 billion. So of that remaining $60, how do you split that between commercial pharma and manufacturing?

In terms of balance sheet value.

NAV, equity.

NAV. Yeah, I think manufacturing is probably, sure, I'm going to give it a go, but I think it's, you know, we don't really, because remember our manufacturing doesn't just service manufacturing, it also services our commercial pharma industry. So we don't actually go and say, well, manufacturing assets only serve as manufacturing profit and commercial. So that split of assets is not just manufacturing. So I think it would be probably an unfair number to quote, but I think your big assets in manufacturing are in your property, plant and equipment, and those are probably $20 billion-odd, I would guess. I think it's like a 60-20. You've got a lot of IP in the commercial pharma business. Even with the APAC out, you've still got about 50 billion, I think, of IP. But obviously you've got all your other assets and liabilities sitting in there as well.

Okay, now that's helpful. And then, I mean, you focus a lot on EBITDA. How much... Time and attention, do you focus on return on invested capital? Because that has shown a concerning declining trend over many years. And do you look at it separately for the commercial division and the manufacturing division and the group as a whole, or how do you look at that?

I understand there's a formula, and I understand the formula doesn't look good, and we understand that internally. You've also got to understand that aspen might not fit into every formula you create, because as I said to you, We haven't taken a cent from shareholders, and we've got no debt at the end of all of this, and yet we've created so much value. So what is not taken account in any formulas is we do buy and sell businesses. I mean, we're not very different to private equity in a lot of what we do. Within every couple of years, every year, we make some fairly significant divestments and sales. But the return on invested capital is not acceptable. I absolutely agree with you. I can't argue with you. It is a problem when you lose 1.7 billion rand on 20 billion rand of assets, just using Sean's numbers. So I'm talking about manufacturing. And that needs to change. And as soon as you change that, then a lot of your formulas change. You will find that... this divestment will result in an improvement on the return on invested. Sorry, Sean, this is your seat. Are you happy? Sorry. It will result in an improvement on return on invested capital. But I agree with you. It's something one has to focus on, but I don't think that you should just put a unilateral formula. If we took out of the business, these assets are incubators. It's like taking an R&D business and saying, oh, you're not getting a return on these assets. But if we don't get a return, then yeah, you're right. But if we're going from minus 1.7 to zero to plus 1.7, you're going to get a very different return on those core manufacturing assets. I know Sean said that they split, and that should be good. And you get a good sense... You know, we're also not in the industry where you can buy things at three times EBITDA or two times. We just don't have... We don't have those type of luxuries. But then when we sell, we also don't sell at those type of luxuries. So if you take 11.4, 11.5 times EBITDA, whatever we achieved in the Australian divestment, you take off the depreciation tax after tax, put it over what we've got, you see the return is high as well. So I don't, I think formulas are very important and they stabilize, but I think you've also got to try and understand what the adjustments under that are.

Okay, this is the last one for me. On that question, what we're trying to understand is the trend in the return on investors' capital. Has it been stable for commercial pharma and has the investment in manufacturing great down? That's what you're trying to understand. So if you could give us a split in the assets between the divisions, it would be very helpful for the market to better understand the group and where the value lies.

Yeah, agreed. I hear where you're coming from. It's just we've got split assets. We've got a factory and they take South Africa. It makes for our South African business and it also makes for manufacturing. So look, we could do that exercise for you and we could try and work out how we split that out, Sean. I've committed, Sean, to that and we can have a look at that. I'm worried he's going to sell it before you get it.

Okay.

Good morning. My name is Malene. I'm from APSA. I look after the healthcare sector. Aspen's one of my clients. I have a very good relationship with Crispin. So I just wanted to know, based on the sale of the APAC business, is the full proceeds going towards basically reducing your debt or will be some form of special dividend as well?

So I think where we are on this, and I mean, I don't think you have to be Nostradamus to work out what we're telling you. We're saying, okay, get the money. We first want to get the money, put it in the bank. Have a look at it for a while. I haven't seen a positive on an Aspen bank account for 30 years. So if not, just a little have a glance and see it. Okay, looks quite nice up there. And then to say to ourselves, okay, what do you do with the money? Now, this is something that we'd have to run through the board, but you're asking me, okay? I've got to say to you, I'm telling you that there's a problem with the sum of parts. The value of the company is not represented. So it obviously makes sense to give shareholders back money in that company, through a buyback or to buy the shares back. To me, that's a logical answer. I don't have, I've got lots of people in the board who've all got ideas and all much smarter than me on all of these type of things, but just logically, it makes sense, you've got no debt, you're generating a lot of cash, and if your share price stays where it is, and you don't believe it represents value, and you can show any metrics you want, you just say, here's commercial pharmaceutical business together with the APR business, and this is a fair multiple. And then here's the sterile business, which people have put a negative on, but we think is very valuable. And you add that together, and you'll come to a number, and you divide by the number of shares, and it's very different to your share price. Then you've got to say to yourself, well, you know, it's got to be something I've got to recommend. We need to be looking at how we return money to shareholders. Absolutely.

There's another one there.

You know, we don't have to make massive acquisitions. If we just focus on what we've got in front of us, we've spent our money. We now need to deliver on the assets we spent money on, fix all Mohammed's formulas for him, and you grow your business organically. Why would you want to go and be spending a whole lot of cash when you've got all that growth underneath there? Okay.

I see Steve from AVAX. I'm just a bit confused. The first slide you show adjusted EBITDA of just over $5 billion, but then in your guidance you say you'll at least double the first of normalised EBITDA of 3.8.

I gave you continuing operations, Steve. Is that just a continuing? That's just continuing. So I gave guidance on continue because if it's gone, it's gone. So just a point made here. We showed you EBITDA of $5.1 billion. for the whole business. That included the APAC divestment. If you take out the number, which is about 1.2 for the half of the APAC divestment, you'll get to 3.8. So that is what we showed you. And to me, if I'm sitting in your shoes, Steve, that's what I'm looking at. I've got 3.8 times 2, that's what I've got, and it's debt-free. And that's for this year, and I gave you a table of what we hope to achieve for 2027. Okay, cool.

Stephen, Sean, so there are a couple of questions that have come through, but just in the interest of time, I'm consolidating. A few of them are speaking about your priorities in terms of capital allocation, and I think that you've just answered that. Zintler from Marsy, she wants to know what the insulin contract regulatory approval entails and whether the 300 million rand will be this year, but I think you did say it was in FY27.

So that's not to do with insulins. So let's just be clear. There's an insulin contract that has value, and we're hoping that the sales, say in financial, 27 of insulin could be a billion rand. We're also saying that in independent, that's in our South African facility. In addition to what we've told you, there's a further 300 million that we expect out of our French facility. That's EBITDA. Sorry, it's not turnover. That's EBITDA.

Again, she also wants to know whether you can split up the Manjaro revenue in South Africa.

I don't know if that's something that... Yeah, we've given guidance of $1.3 billion, and you sort of can take sort of half, a little bit less than half, or something like that.

Right, and then I think the last one over here is just in terms of the commercial relationship with Dr. Reddy's and the GLP-1.

Yeah, we've very close relationship with Dr. Reddy's. We identified them as a key strategic partner. Aspen has real strengths in peptides. Remember, we've got an API business that deals, sorry, GLP-1s, what goes into GLP-1s are peptides. And we have real strengths in peptides as a business. We've got a factory that makes peptides, not those particular ones, but makes peptides. So we went to see the field of players who had the right active ingredient. We identified peptides. Dr. Reddy is a key partner for Aspen. So we are a key partner with them. We have access to IP through them and other things. So I think there's a question. Does that answer the question? Okay, thank you.

Okay, thank you. I think that's going to have to bring the presentation to a close. Thank you very much for attending this morning and for the participation both here and online. Thank you very much for having us. Thank you.