Aspen Pharmacare (APN) H2 2025 earnings summary

Executive summary

• Commercial pharma delivered strong, sustained double-digit CER growth across all segments and regions, especially in Africa, Middle East, and Latin America, with notable momentum in China and successful Latam acquisition.

• Faced extreme macroeconomic turbulence, including currency volatility and regulatory changes, requiring a shift in strategy and operational focus.

• Loss of a major manufacturing contract and retrospective global tax changes significantly impacted EBITDA, net earnings, and led to increased impairments.

• Strategic focus now on sustaining commercial pharma momentum, restructuring manufacturing, and unlocking value from assets.

• Operating cash conversion rate reached 147%, a five-year high, supported by improved working capital management.

Financial highlights

• Group revenue at ZAR43bn, down 3% reported but up 1% at constant exchange rates; Commercial Pharma revenue up 10% CER, Manufacturing down 19% CER.

• Normalized EBITDA at ZAR9.6bn, down 8% year-over-year at CER, mainly due to the contract loss.

• Normalized headline earnings per share fell 22% at CER, with higher interest and tax costs.

• Gross profit margin improved to 44.1% from 42.6%, driven by higher commercial pharma mix.

• Net working capital as % of revenue increased to 47%, above the 45% target, mainly due to contract loss.

Outlook and guidance

• Double-digit normalized HEPS growth expected for FY26 at constant currency, supported by improved EBITDA margin.

• H1 2026 CER NHEPS to be below H1 2025, but strong double-digit growth expected in H2 2026.

• Mid-single digit commercial pharma revenue growth forecast, with higher EBITDA and gross profit margin improvements.

• Manufacturing EBITDA targeted to return to positive by FY27, with no GLP-1 income included in current guidance.

• CapEx to decline to ZAR3.8bn in FY26, with further reductions planned to align with depreciation by FY27/28; leverage ratio projected to fall below 3x.