Adcock Ingram Integrated Report 2018

0 250 500 750 1000 1250 1500 1750 2000 16 15 17 18 Turnover (R’million) 0 50 100 150 200 250 300 350 400 16 15 17 18 Trading pro t (R’million) OVER THE COUNTER (OTC) PRESCRIPTION Gross margin as a percentage of sales improved from last year, primarily as a result of an exchange rate benefit on imported rawmaterials and good price realisation. The operating expenses are 6% higher than the comparative year, mainly as consequence of the higher sales. Trading profit of R400 million ended 17% or R57 million ahead of the prior year. The gross margin improved in the current year through an improved factory recovery as a result of increased production of Trivenz inWadeville, as well as a positive exchange rate benefit on imported inventory purchases. The operating expenses ended above the prior year due to the inclusion of Genop, dossier investments and an increase in the provision for state debt outstanding for more than 90 days. This resulted in trading profit of just short of R240 million, 15% ahead of the comparative year.   8.0%   17.0% This division’s turnover of R2.2 billion improved by 16%, with Genop contributing R224 million. An average price increase of 2% was realised and is reflective of the pricing pressure in parts of the generic and ARV portfolios. Volumes increased by just under 4% driven by the demand in the ARV private market. Mix, although impacted by the loss of a low-margin multinational partner contract, improved by 10%, substantially aided by the acquisition of Genop, and the on- boarding of the Astellas portfolio from Leo Pharma and Topzole from Takeda. Turnover, just short of R2 billion is R140 million or 8% ahead of last year mostly arising from a 7% average price increase (driven by the non-regulated portfolio and exports) and the balance from mix with the introduction of the Abbott brands (Creon, Calmettes, Brufen, Duphalac) as well as the new product launches (Immuenza, Asic and GAP). 0 500 1000 1500 2000 2500 16 15 17 18 Turnover (R’million) 0 50 100 150 200 250 16 15 17 18 Trading pro t (R’million)   16.0%   15.0% Financial review (continued) ADCOCK INGRAM  Integrated Report 2018 20 OUR PERFORMANCE