Adcock Ingram Integrated Report 2018

GROWTH AND EXPANSION TRANSFORMATION PILLAR 2 PILLAR 3 2 3 STRATEGIC FOCUS WHAT WE ACCOMPLISHED IN 2018 FOCUS AREAS FOR 2019 AND BEYOND Transformation Adcock Ingram improved from a level 4 to a level 3 B-BBEE contributor. Investigate participation in the YES programme which is part of the Draft Statement on the Codes of Good Practice on B-BBEE. Employment equity 85% of permanent employees are Black, 48% of permanent employees are female. Improve black representation at senior and middle management. Board representation – 64% are Black directors, 57% are female directors. Roll out a disability awareness campaign to the entire business and continue to retain learners with disabilities. Divisional Employment Equity plans have been implemented. Implement a talent pipeline for junior pharmacists. R33 million was spent on skills development compared to R23 million in the prior year. Preferential procurement R1.7 billion was spent on suppliers with a B-BBEE status of 4 or better, of which R573 million was spent on >51% black owned suppliers and R271 million on >30% black women owned suppliers. Focus on growing small and medium black-owned businesses. Supplier development Adcock Ingram continued to invest in its owner-driver distribution scheme. R16 million was invested in the year, increasing the owner drivers including employees to 232 persons and 116 vehicles. Investigate other supplier development programs. Other CSI spend for the year was R6.6 million. The partnership with Netcare on recycling of plastics to expand. Adcock Ingram received an award of recognition for being one of the most supportive corporates of the SAME foundation. The CSI programme will continue to focus on Healthcare and Education. Actively engaging in pro-active commentary on the National Health Insurance and Medical Schemes Amendment Bills through the industry bodies - Pharmisa and PTG. STRATEGIC FOCUS WHAT WE ACCOMPLISHED IN 2018 FOCUS AREAS FOR 2019 AND BEYOND Acquisitions Acquisitions concluded during the year included: u u Genop, a highly specialised instrument, surgical and pharmaceutical products company focused on the ophthalmic, optometry, skincare, aesthetic and plastic surgery segments in Southern Africa. Genop owns and markets the well-known Epi-Max branded range of consumer products. u u SpiderTech licence and distribution rights were acquired by the Hospital Division (kinesiology tape). The search for acquisitions in 2019 will focus on expanding the less regulated portfolio. Partnerships The Prescription division: u u implemented a marketing and distribution agreement with Takeda for its well known Topzole brand for treatment of stomach ulcers and gastroesophageal reflux disease; u u implemented a marketing and distribution agreement with Novartis for Aclasta for the treatment of osteoporosis; u u obtained the sales and promotional rights for the Astellas dermatology range (Protopic, SBR, Locoid and Zineryt) from Leo Pharmaceuticals. The Prescription division will investigate further multinational partnerships in order to expand Adcock Ingram’s product offering. The OTC business: u u concluded a sales, marketing and distribution agreement with Abbott Laboratories for Brufen, Duphalac, Creon and Calmettes. The OTC division will investigate strategic collaborations with global/regional OTC specialist companies to broaden its product range in South Africa. The division has signed a marketing and distribution agreement with Pierre Fabre for Dexeryl, an emollient for the treatment of dry skin for launch in early 2019. Innovation A number of new brands/products were launched during the year including the OTC division’s Burnloc for heartburn/ hyperacidity, Immuenza to support the immune system, and the GAP range of multivitamins and minerals. The Hospital division recently launched the ADCO Hygiene range of hand and surface disinfectants. Further line extensions and product rebranding initiatives will be introduced in 2019. Innovation included rebranding of certain product lines such as OTC’s vita-thion (as vita-thion Fizzies and vita-thion Extra). New customers and sales channels The OTC division continues to grow its business into the Rest of Africa. The OTC and Consumer divisions will continue to look for ways to service informal and convenience channels in order to provide greater access to Adcock Ingram's products. With the aim of increasing sales to African countries, the business is currently registering products in Ghana, South Sudan and Ethiopia, with expected commencement of sales in the 2020 financial year. ADCOCK INGRAM  Integrated Report 2018 13