Health and care brands group Ascendis Health increased its revenue by 66% to R3.1-billion in the half-year to December 31, as the business significantly increased international sales following two major acquisitions in Europe.

This included the acquisitions of Cyprus-based pharmaceutical manufacturer Remedica Holdings and European sports nutrition business Scitec International, for a combined €430-million.

CEO Dr Karsten Wellner noted that the acquisitions formed part of the group’s strategy to internationalise the business by buying platform businesses in offshore markets and extracting synergies from these businesses. “Our strategy ensures diversity across products, channels, geographies and currencies,” he said.

Remedica and Scitec have been successfully integrated into the group and contributed revenue of R940-million for the five months since they were acquired. This resulted in the group’s foreign revenue increasing by 270% to R1.3-billion, accounting for 43% of total sales and providing a natural hedge against rand volatility.

Meanwhile, the group reported an 89% increase in its normalised earnings before interest, taxes, depreciation and amortisation (Ebitda) to R541-million, with the Ebitda margin increasing by 210 basis points to 17.4%. 

Ascendis’s headline earnings on a normalised basis also increased by 105% to R310-million, with normalised headline earnings a share up 34% to 74.9c apiece. The interim dividend increased by 16% to 11c apiece. 

On the outlook for the remainder of the financial year, Wellner said synergy projects for Remedica, Farmalider and Scitec would remain management’s priority.

The company said it would also remain acquisitive, seeking value-enhancing opportunities locally and offshore, with R750-million available for such activities over the next year. “We are currently evaluating potential acquisitions of platform and bolt-on businesses in Europe and emerging markets, as well as South Africa,” Wellner added.

During the period under review, the company also bought Sunwave Pharma, an over-the-counter (OTC) nutrition and food supplements brand business in Romania, for €42.5-million, with a maximum deferred payment of €23-million over three years based on financial targets.

“Sunwave provides an attractive platform for Ascendis to enter the high-growth Romanian and eastern European OTC markets. The business has a strong sales and profit record based on a unique distribution model of marketing complementary medicines directly to doctors through a sales force of 290,” commented Wellner.

Ascendis earlier this week also announced the acquisition of the Southern African animal health product operations of Cipla India, which comprise Cipla Vet and Cipla Agrimed. The R375-million acquisition is also expected to be accretive from May.