Business Segment

Regional Brands revenue increased by 3% to R17 405 million, with 13% growth from Australasia and 8% from the Americas, being the major contributors and benefiting from having strong OTC portfolio performances. Severe supply constraints, including a fire at Aspen’s Alphamed site in India, and product portfolio divestments impacted the performance in South Africa, with Africa Middle East down 3%. The final impact of the mandated European oncology price cuts reduced the strong base revenue growth in Europe CIS from 11% to 1% as confidence begins to build in the restructured Europe CIS team. Excluding the annualised impact of the product divestments in South Africa and the oncology price cuts, Regional Brands grew 5%. Gross profit percentage was up at 56,5% (FY2021: 54,3%), driven by cost of goods savings and portfolio optimisation, combined with a favourable product mix.

In the coming financial year, we anticipate the current organic growth momentum to be sustained, supported by a strong recovery in Africa Middle East through new product launches and stable product supply following a year of severe supply constraints.

The Australian region will be negatively impacted by the regulated price decreases, with an estimated impact of AUD10 million. However, the region will continue to focus its efforts on growing its OTC prescription (OTX) portfolio that has shown strong double-digit performance and that is not exposed to regulated price reductions. This includes the benefit of incremental revenue from the recent acquisition of OTC products from ENTT. We will continue to evaluate bolt-on acquisition opportunities in line with our capital allocation and portfolio management models with a strong preference for emerging markets and OTC products.