Good day, ladies and gentlemen, welcome to Adcock Ingram's year-end results presentation. All attendees will be in listen-only mode. There will be an opportunity to ask questions when prompted. If you should need assistance during the call, please signal an operator by pressing star and then zero. Please note that this event is being recorded. I'd now to hand the conference over to the CEO, Mr. Andy Hall. Please go ahead, sir. Thank you, Judith. Good morning, ladies and gentlemen. Welcome to our results webcast for the year ended 30 June 2023. We appreciate you taking time to show interest in the company. Although we're reporting a good set of results, yesterday was a very sad day for Adcock Ingram. When we established the OTC Sponsors of Brave during COVID, which effectively was a campaign established to recognize healthcare workers who were doing exceptional things during COVID, and post the pandemic, to recognize healthcare workers who do good work in their communities, Derek Watts came on as the ambassador of the Sponsors of Brave, and he's been with us since that campaign was started. Unfortunately, you would have heard yesterday of the sad passing of Derek. He was an extremely good ambassador for our company and someone who epitomized bravery in all aspects of his life. At the company, we extend our condolences to his wife, Belinda, his children, Kirsty and Ty, and all his family and loved ones. A great giant has fallen in the broadcasting industry, and I think in South Africa in general, and we wish that Derek's brave soul will rest in peace. I'm gonna take you through an overview of what we consider to be a solid financial and operational performance. Once again, I think at Adcock Ingram, we've, we've been fortunate on the resilience and defensive nature of our, of our healthcare portfolio, and our team's ability to adapt to what's happening in the market at the moment, particularly with the depressed consumer and a weak rand. According to IQVIA, the company that measures pharmaceutical market shares, Adcock Ingram has retained its top rank position in the private pharmaceutical market in South Africa. They also report again at the end of June, that Adcock Ingram is the biggest provider to the state in South Africa. For the year under review, turnover improved by 5% to ZAR 9.1 billion. This was aided particularly by strong trading performances from our OTC and prescription divisions. Mix contributed 4% to the increase and included the onboarding of the E45 skincare range, which we got from a Scandinavian company called Karo Pharma. We also had a number of new product launches in the prescription division. Organic volumes did decline by 3%, and this was mainly due to reduced demand for products used in the treatment of COVID-19. As you will recall, we also had a much lower ARV tender award in the last adjudication, so those volumes also were down significantly. The organic volumes declines, though, were mostly compensated for by improved demand in the OTC business, which really recovered nicely, and the prescription private sector portfolio. We got overall price realization out of our portfolio of 3%. The gross margin declined marginally from 35.1% to 34.9%. We think that's a pretty exceptional outcome if you take into account the weaker exchange rate. Dorette will give you the exact figures later on. The additional operating costs due to electricity and water disruptions, significant cost push from suppliers over the last year, as well as wage increases. Effectively holding that margin at 35%, we thought was a very good outcome from our teams. Operating expenses were well controlled. They increased by just 3%, that then resulted in a 6% improvement in trading profit to ZAR 1.18 billion. With the benefit of a lower tax rate, some good joint venture income, and the effect of a share repurchase that we did during the year, that all translated into double-digit growth in headline earnings per share, we pushed the total dividend for the year up by 17%. The EPS was up 12. Just moving on to some regulatory issues. As you know, the quantum of the annual Single Exit Price adjustment that's awarded by Department of Health, determines to a large extent, the pressure on our margins in our regulated portfolio. We did receive a sub-inflation Single Exit Price adjustment in January 2023. That was 3.28%. Since then, we've had a significant amount of interaction between the industry and the Department of Health. That eventually resulted in a top-up adjustment being granted by the minister, that top-up being 1.73%. We're busy with the administrative work around getting that into the portfolio, probably will become effective at the end of September. We welcome, of course, that top-up adjustment. If we look at the combined annual adjustment and the top-up, it is still below our current input inflation and also below the Consumer Price Index for the last 12 months. We can still expect quite a bit of margin pressure on the price-regulated basket of products going forward. Looking at the highlights of the divisions, our consumer division, which competes in healthcare, personal care, and home care segments of the market, mainly in analgesia, energy, and dermatology, smaller portfolios in sun care, vitamins, minerals and supplements, shoe care and home care. The business is now home to four brands with revenue in excess of ZAR 200 million per annum, and reported an increase in turnover of 6% during the year. The standout performance was from one of our flagship brands called BioPlus, which has shown growth in excess of 20%, and the widely used Epi-max brand grew in double digits, very close to 20%. The division did experience significant cost push from its suppliers. A large proportion of its portfolio is imported in dollar terms, and with the adverse impact of the weak rand, the 6% increase in turnover yielded trading profit of just 2%. As previously reported, this division also commenced with the selling, marketing, and distribution of the well-known E45 skin treatment range in January 2023, and in the 6 months, we got revenue of just under ZAR 50 million out of that brand. There were also line extensions within the existing portfolio that added another ZAR 30 million in revenue, mainly in Epi-max, where we put some body washes, some soap, baby wipes, and lip balm into the market. We've broadened the GynaGuard and Cepacol offerings, and then Plush, our Home Care business also launched some range extensions during the year. We've seen nice innovation from that business over the last year, just to counter those volume declines. Our OTC division, which, as you will know, is the market leader in pain, cough, cold and flu, digestive and allergy therapeutic categories through the pharmacy channel in South Africa, has a market share of about 19% in Schedule 1 and Schedule 2 medicines in pharmacy. We now have three brands in that business, producing revenue in excess of ZAR 200 million per annum, and we've grown another two brands this year to revenue in excess of ZAR 100 million for the year. A nice core portfolio in this division. We saw turnover improve there by 11%. Products like Allergex, which is the biggest brand in that division, Alcophyllex, Adco -Mayogel, and Scopex, all posted double-digit ex-factory growth. The gross margin was softer than the prior year, again, mainly due to the weak currency and increases in production costs, but trading profit not far off the revenue growth increased by an impressive 10% to ZAR 349 million. Our prescription division, which is the division that markets our branded and generic medicines that require scripts from doctors, also does some specialized skincare products, and is the biggest ophthalmology company in the country. Also promotes brands on behalf of multinational partners. They grew turnover by 2%, which I know will not look particularly impressive, but there was a solid performance from all the segments there, except ARVs, where we had a big decline in the tender volumes. The performance of this business has been supported by a normalization in elective surgeries, and also full healthcare practitioner rooms in visits post-COVID-19, and they had a good year in terms of product launches. In their branded prescription portfolio, 8 of the 10 top products are in growth, and in their generic medicine portfolio, 7 of the top 10 products are growing, and they've retained their fourth place ranking in the prescription market according to IQVIA. They launched five new products during the year, including a product for breakthrough cancer pain on behalf of Teva, one of our partners, and Vimovo, a combination of a non-steroidal anti-inflammatory and proton-pump inhibitor from Grünenthal, also one of our multinational partners. That Vimovo brand, in fact, did more than ZAR 40 million since launch, so a good, good product for us. On the back of the revenue increases, some nice gross margin expansion because of less ARVs in the mix. This division grew trading profit by an exceptional 16% during the year. Our hospital division is the leading manufacturer and supplier of critical care and hospital products in South Africa. Turnover here increased by just 2%, as there was lower demand for products used in the treatment of COVID-19. The business and a number of its key suppliers also experienced production and supply chain challenges during the year, and with increased production costs, this led to trading profit decline of 7% in this part of the business. The South African large volume parentals tender, where we currently have a share of about 60%, expires at the end of September 2023. We expect adjudication of that tender imminently, so we'll know what things look like there going forward. Looking at our manufacturing and distribution facilities, at Clayville, this is our plant that does high volume oral liquids, effervescents and powders, and also eye drops. They had some operational issues during the year, including power supply challenges, some civil action in the broader Tembisa area where it's located. Nonetheless, the oral liquids facility operated in excess of 50% of capacity during the year. The effervescent facility, above 70%, and utilization of that ophthalmic facility is steadily increasing. We have, at Wadeville, a liquids facility, which has shown very good improvement in throughput during the year. We pulled in some third-party manufacturing into that business. Contract manufacturing that was done on our products, we're now doing internally. Manufacturing unit output in that part of the facility, doubled year-on-year. The oral solid dosage part of that facility has now been reconfigured for shorter runs, following the low allocation in the ARV tender, and capacity utilization in that part of the factory was equivalent to the previous financial year, despite the significantly reduced ARV tender volumes. At Aeroton, where we do our intravenous drips and renal fluids, again, some production problems there, mainly around complications with electricity supply interruptions, which also have a knock-on effect onto water supply, resulted in some fairly hefty product- in-process product write-offs and a lot of diesel usage at that factory, but still ran at capacities in excess of 90% during the year. Our distribution business operates in partnership with RTT, who do all our outbound logistics for us. We have a contract with them that expires at the end of February 2024. We have executed a new contract with RTT just subsequent to the year-end, and that'll start running from the 1st of March 2024 for a period of 40 months. Our focus in distribution remains service levels, which were good during the year. We had a 98.5% on-time delivery, regulatory compliance, and of course, cost containment. The biggest issue there, in terms of cost, being what happens with the diesel price. The three major risks in our warehousing and logistics operations are that diesel price, reliable power supply, and any civil unrest or industrial action which may affect the transport industry, which you have seen quite commonly over the last year. Moving on to our ESG journey. In our efforts to manage the effects of unreliable electricity supply and move towards renewable energy, we now have solar installed at five of our sites, including our Clayville manufacturing site and four of our distribution centers. Our Clayville installation that we did this year, accounts can supply up to 30% of our daytime energy usage at that factory. Solar energy is starting to grow in our business. It made up 5% of our electricity supply over the last year, and if we include the electricity supplied by our generators, we generated about 11% of our electricity during the year. We've put real-time water and electricity meters in at all of our sites. Our other environmental initiatives are focused on water harvesting. We've installed water harvesting at most of our sites now, and we are particularly focused on our waste management and reducing the waste that we send to landfill. That's improved significantly over the last year. We've also got a pilot project running. We've got a couple of electric trucks that go and collect our pallets from our customers, and we're extending that pilot project as we speak. Our transformation remains a key focus in the group. We are still a level two B-BBEE rating as of the end of November 2022. We will have a new accreditation done at the end of November 2023, effectively based on where we ended at June. We don't expect any significant deterioration in our rating. We've also expanded our enterprise and supply development program during the year and continued to invest in corporate social responsibility projects. These CSR projects included a new fully equipped computer laboratory at a Feed My Lambs school here in Eldorado Park, near Soweto. We did that with the SAME Foundation. We are still continuing to financially support the Smile Foundation, which does magnificent work and operations on children born with facial abnormalities. That concludes my overview of the company. Dorette will give you a detailed commentary on the financials, and then we'll be happy to take questions after that. Thank you, Andy. Good morning, ladies and gentlemen. Before I get into the details of the financial results, I would just like to mention that the annual financial statements are available on our website as well as on the SENS platform. We have also provided summary financials on our website, and this investor presentation will be made available a bit later today. I will now move to the financial results, which we regard as a healthy financial performance for the year. I'll start with the income statement and just give a bit more color to certain figures Andy already mentioned. Revenue for the year under review increased by 4.9% to ZAR 9.1 billion. Mix contributed 4.2% and includes the onboarding of E45 from Karo Pharma, as well as the number of the new product launches in prescription division and some line extensions in the consumer division. Overall, price realization of 3.4% was achieved. The organic volumes declined by 2.7% due to the lower demand for products used in the treatment of COVID-19, as well as the lower ARV tender sales. Much of this decline was compensated for by the strong demand in the OTC and other prescription portfolios. Gross profit of almost ZAR 3.2 billion ended 4.2% ahead of the prior year, some slight deleveraging from the sales increase that we've seen. The gross margin declined marginally, as Andy alluded, 10.2% in forward exchange rates for products acquired in foreign currency. The significant cost push from both local and foreign suppliers-... increased production costs due to the interruptions in water and electricity supply and wage increases of 7%. Every attempt was made to mitigate the margin compression through selling price increases in the non-regulated portfolios, increased throughput and efficiencies in the factories, and concentrating the sales mix on products with higher margins. In the prevailing circumstances, we are very satisfied with the margin that we achieved in the business. In a closer look at the impact of the exchange rate, we bought the following material foreign currencies during the year: $72 million US dollars at an average rate of ZAR 17.19, which represents a 12.9% weakening relative to the prior year, which was at ZAR 15.22, and EUR 46 million at an average rate of ZAR 18.19, which represents a 3.9% weakening compared to the previous year, which was at ZAR 17.51. With approximately 60% of FECs in US dollars and 40% in euro, the weighted cost of our basket of all currencies, weighted on actual settlements in the period, was then 9.2% higher than last year. At 30 June, the group was carrying the following open FECs: $16.2 million at ZAR 18.64, which is a further weakening of 8.4% over the ZAR 17.19 we achieved in the 2023 financial year. We also carried EUR 25.8 million at ZAR 20.30, which is an 11.6% weakening over the ZAR 18.19 achieved in the 2023 financial year. Looking at operating expenses of just over ZAR 2 billion have been well controlled and increased only by 3.1% below inflationary levels. The primary drivers was increased distribution, regulatory, and IT expenses. Trading profit of just short of ZAR 1.2 billion ended 6.1% higher than last year. The non-trading expenses of ZAR 45 million consist of share-based expenses of ZAR 44 million and a fair value adjustment on a long-term receivable of ZAR 1 million, leaving operating income of ZAR 1.14 billion, 7.9% above the prior year. Net finance costs were ZAR 52 million during the year, including IFRS 16 finance costs of ZAR 30 million. This was ZAR 11 million higher than the prior year, following the increase in the average borrowing cost of 7.4% last year to 10.2% in the current year. Equity accounted earnings from joint ventures for the year improved an impressive 36.9% to just short of ZAR 120 million. National Renal Care, our JV with Netcare, showed growth of 27%, and our joint venture in India with Medreich, Meiji, showed growth of 42.3%. Just as a note, India comprise about two-thirds of those earnings. The effective tax rate, adjusted for equity accounted earnings, is 28.3%, with nondeductible expenditure causing the increase over the statutory rate. We no longer have any minority interests, as both of the companies with minorities, which were Novartis Ophthalmics and Menarini, have been dissolved. Headline earnings for the year amounted to almost ZAR 900 million, compared to the prior year of ZAR 812 million, an improvement of 10.7%. The group increased its treasury shares, held by a subsidiary, by an additional 9.2 million shares during the year at an average cost of ZAR 51.16. This supported the increase in headline earnings per share to ZAR 5.613, 11.8% above the previous year. If we turn to the balance sheet, starting with non-current assets. Within the non-current assets, depreciation charges amounted to ZAR 189 million, which were ZAR 5 million ahead of the prior year and include depreciation charges of ZAR 44 million on the separately disclosed right of use assets. Intangible assets, including goodwill, have a carrying value of ZAR 1.2 billion and comprise of consumer, OTC, and generic trademarks and license agreements. Amortization in the year was similar to 2022 and was ZAR 9.4 million. In looking at the current assets, we had inventory of ZAR 2.4 billion, which is stated at the lower of cost and net realizable value. Our days in inventories increased from last year's 133 days at June to 141 days at the end of this past June. The increase from last year includes supplier price increases and the exchange rate impact. We had extended lead times on certain raw materials, so bought up some safety stock. We had new product launches, as well as the onboarding of E45, and then there was items that were previously out of stock, back into stock. Our trade accounts receivables of ZAR 1.8 billion are shown net of provisions of ZAR 38 million, and despite being ZAR 217 million higher than last year, which is purely a factor of the high sales in the, towards the last quarter of the year, days and receivables are now 55 days, an improvement from the 58 days we reported last year. Government debt makes up 12% of this trade receivable figure, and of this, 64% of the amount is due within 60 days or less. The net cash and cash equivalents amounted to ZAR 82 million, as we do disclose a cash balance of about ZAR 92 million and an overdraft balance of ZAR 10 million. Looking at the bottom part of the balance sheet, the group had shareholders funds of ZAR 5.4 billion at June 2023. The ZAR 87 million movement in the non-distributable reserves since June last year, relates to changes in the foreign currency translation reserve of ZAR 45 million, relating to the Indian JV conversion. The share-based payment reserve increased by ZAR 35 million and the cash flow hedge accounting reserve by ZAR 5 million, and then there was some smallish year-end fair value revaluations on the post-retirement medical aid and an investment. Turning to the segmental information and starting with the consumer division. Excuse me. Consumer turnover of ZAR 1.66 billion ended 5.9% above the prior year. The increase in their turnover was supported by an average selling price increase of 6.9% and a mix benefit of 5% due to product extensions in Epi-max, Cepacol, GynaGuard, and Plush, and the onboarding of the E45 skincare product range. Organic volumes declined by 6% due to the lower demand for Panado, which benefited from COVID-19 vaccination campaign in the prior year. The lower volumes are also an indication of pressure on consumers' wallets. The growth margin ended well below that of the prior year, as the full impact of the significant cost pushes from suppliers, as well as the weaker exchange rate. This division was mainly impacted by the move in the US dollar, could not be fully compensated for by the selling price increases. Operating expenses were very well controlled and ended below the prior year, due to savings in discretionary expenses and curtailed marketing expenditure in an attempt to compensate for the pressure on the growth margin. As a result, trading profit ended on ZAR 357 million, 1.6% ahead of the prior year, a performance which we regard as commendable. Moving to the OTC business, with turnover of just under ZAR 2.3 billion, ended a very healthy 10.8% above the prior year, due to strong sales performances from the pain, cough and cold, and allergy portfolios in the first half and the last quarter of the financial year. Volumes improved by 5.1%, with major brands like Allergex, or Cofilex, Achromio gel, and Scopex continuing to show good growth. Average price realization in this business was excellent at 5.7%. The growth margin ended below that of the prior year and was adversely impacted by the weakening of the rand, as well as increased API costs and increased production costs during water and electricity disruptions. Operating expenditure ended pretty much flat compared to last year, and they also curtailed some marketing expenditure following the pressure on their growth margin. As a result, trading profit of almost ZAR 350 million ended 9.6% higher than the prior year, and we think that's a very good achievement under the circumstances. In looking at prescription, where sales of just under ZAR 3.3 billion ended 2.1% ahead of the prior year, mix contributed 8.6% with several new product launches, as Andy mentioned earlier. Organic volumes declined by 7.8%, attributed to the loss of the IOV tenders, the average price increase that this division realized was only 1.2%. The growth margin improved since last year, it was impacted by this beneficial sales mix, with a lower proportion of low-margin IOV tender sales. As a result, trading profit of ZAR 320 million ended a very impressive 15.8% ahead of the prior year. Lastly, our hospital division. Sales of ZAR 1.9 billion ended 2.4% above the prior year, as this division was impacted by local and international supply and production challenges and the reduced demand for COVID-19 related products. A price increase of 1.9% was realized, with volumes and mix contributing to the balance of the increase. The gross margin ended below the prior year, with the adverse impact from the exchange rate. This division is mainly impacted by the euro rate, which was a little bit better than the depreciation of the dollar rate, and they also have seen higher production costs, but those were partly compensated for by the beneficial sales mix of higher private market sales. As a result, trading profit declined by 7.4% to ZAR 152 million. Thank you, ladies and gentlemen. That concludes my part of the presentation, and I will hand back to Judith, the operator, and we welcome any questions. Thank you very much, ma'am. ladies and gentlemen, for the benefit of the participants who have joined via the telephone lines, if you'd like to ask a question, please press star and then one on your telephone keypad or the keypad on your screen. If you decide to withdraw the question, please press star, then two to exit the question queue. For the benefit of the participants who have connected via the webcast, you're welcome to pose your questions in the question box provided on your screen. At this stage, we have no questions on the telephone lines. I will now hand over to Dorette Neethling for questions on the webcast. Thank you, Judith. I'll start with a question from Grant Morris, from Clucas Gray. Grant, if you don't mind, I'm going to maybe combine it with a question from James Corkin on Steyn Capital Management. There are actually two questions, and the first one with regards to the top-up Single Exit Price adjustment of 1.73%. Grant is asking: What brought this about? What is the industry lobbying about, and what is the approach going forward, given that the SEP calculation still seems to be far off from the actual formula calculation? Maybe if you deal with that, I'll, I'll give you the share buyback question after that. Thanks, Dorette. Hi, Grant, James. Look, there's no question that, that 3.28% increase we got at the beginning of the calendar year, was significantly below the input cost inflation for the industry. If you recall, at the time, effectively, that's when the rand had sort of fallen out of bed. There was, there was gonna be, and was, significant pressure, on margins, not only at Adcock Ingram, but you can assume in any part of the pharmaceutical industry that imports product, which is everybody. Through our Pharmaceutical Task Group, which is an industry association which represents four of the smaller industry associations in the, in the country, we are part of an association called Pharmisa, which represents local manufacturers. We've had extensive interactions with the pricing committee at the Department of Health, the director general at the Department of Health, as well as the minister. Eventually managed to persuade those forums that some sort of adjustment on top of the 3.28% was necessary. You know, this is not only a, a margin thing from year to year. This is about making sure that we protect the local pharmaceutical manufacturing industry and have a sustainable industry in South Africa. I think the minister was gracious. He heard the arguments and I think acted in the best interests of the pharmaceutical, local pharmaceutical manufacturing sector in terms of sustainability. We, you know, we, we felt he did the right thing. Going forward, in fact, PTG will be making its submission to the pricing committee before the end of this month, 'cause we are allowed to make comments once a year before the annual adjustment is made. For the 2024 adjustment, we will be asking the pricing committee again to make reference to the formula that's in the regulations. That formula says 70% CPI, 15% rand dollar, and 15% rand euro. We will make reference to that formula. We will also make reference to CPI, which is running at about 7%, if you look at the average time period for the last year, then effectively, it's in the hands of the pricing committee, relative to whatever recommendation they might give to the minister. At the end of the day, the full discretion on the SEP price increase lies with the minister. Thank you, Andy. The questions with regards to the share buyback is firstly, confirm that the status of the current approval is complete, which I can confirm. Will a further program be considered? Linking onto that, James asked if it's our intention to cancel the almost 17 million treasury shares we have bought and continue buying shares? Would we use debt to do that? Look, on the share buyback, we have completed the mandate that we got from shareholders in November 2022, so there's nothing that we can do in the market at the moment. We will be going at the AGM again and asking for a buyback authority from shareholders, and I can tell you that our controlling shareholder is supportive of buybacks, and our significant minority shareholders, in general, are supportive of buybacks. Although some of them do raise liquidity concerns, which obviously we try and take into account in terms of the size of the mandate that we ask for. We will be back in the market after November, depending obviously on the price at which the share is trading. At the moment, as you see, we have no debt on the balance sheet, but we have about ZAR 1.5 billion worth of approved facilities at the moment. If the, the share price relative to the borrowing costs make sense, then there's no reason why you won't, wouldn't see debt on the balance sheet. We're not specifically raising funds to buy back shares. Thank you, Andy. There is a question from Zinhle Khumalo from Steyn Capital, saying: Could you please explain why the receivables grew by 13% versus 5% growth in sales? Zinhle, I'll deal with that. Our receivables are actually a factor of the sales in the last two months. As I mentioned, our debtors days did decrease, which is an indication that we had very robust sales towards the start of the winter season. I think we all knew in the market that we had seen a bit of an earlier winter. In the prior year, the winter was a bit lighter, I think we only saw more robust sales on the winter products starting in July. June. June and then July, whilst this year it was more, starting April, May and June. It's really just a, a seasonal impact. Nelly Brand-Jonker. Nelly asked: Are the volumes of Panado sold less than before the pandemic? Hi, Nelly. Panado volumes are effectively at the level that they were pre-pandemic. We had a big spike on Panado sales in the previous fiscal year, when a lot of healthcare practitioners were recommending Panado when people got their vaccinations to help them with the side effects. Effectively, we, we're back to where we were. We haven't gone backwards. There's a question from 36ONE Asset Management. Operating expenses have been controlled exceptionally well. Maybe talk a little about how you managed to achieve this in the context of so many inflationary pressures. Yeah, look, 3% OpEx control, we, we think is good. The, the major push in OpEx this year came on the distribution costs because of the diesel price increase. Regulatory costs, which continue to increase in the industry, so that's something that we all have to learn to live with. Then we've done quite a bit of IT work this last year, including on cybersecurity and the like. Where we've sort of held back spend is on, you know, what we call the, the discretionary spend of in-store promotions, those types of things that lie in selling expenses, and then our above-the-line marketing spend, we've also managed to hold back. Going forward, I think we need to be investing again in our above-the-line marketing campaigns. I think it would be difficult to, to show you, a sub-inflation increase in OpEx in the year going forward. Thank you, Andy. Luyanda from Nedbank, I assume that also answers your question on what are the sustainable marketing expenditure levels, given that we have cut this cost. I assume that is answered there as well. Patsy from All Weather Capital. Hi, Andy, can you please unpack the increase in replacement CapEx? I can maybe get to that, Patsy. In two of... or not in two, in certain of our plants, we are obliged to do some regulatory upgrades that are necessary for SAHPRA accreditation. Some of those projects, especially at the Critical Care plant, have started in the current year, and we've already committed to that spend going forward. We've also seen in our distribution facilities that we have to do some regulatory improvements with regards to our HVAC systems across our bigger facilities. Both of those actually helped with, or both of those contributed to the increase in the replacement CapEx. Let me just see. Nick Des-Fontaines from Centaur. Nick asked if we can discuss the India JV in a bit more detail, as it's becoming a more meaningful number on the bottom line. Yeah, Nick, we've, we've had a joint venture in India. It's effectively just a contract manufacturing company. We've had that, that joint venture for around about 15 years now. That business does most of our tablet and capsule manufacture, aside from tablets and capsules that we receive from our multinational partners. It also does contract manufacturing on behalf of some companies in Europe, some other companies here, and other companies in Australia. The main reason for producing in India is the cost of capital there is lower, capital equipment is lower, and the cost of skilled labor is lower. There tends to be a financial reason for manufacturing over there. We've recently put up another factory there, within that JV. Outside of the tablets and capsules, this facility will be doing effervescence and some additional other oral solid dosage forms. It's just received Indian regulatory approval. It's just had its SAHPRA inspection, so we are waiting for the SAHPRA report to see if that facility gets issued with a license or not. That's effectively how that operation runs. We have a 49.9% share. We don't have any managerial control in the business. That's all done by our Indian partner. Thanks, Andy. Warren from Bateleur Capital. If we can comment on any significant changes in the shareholding register, particularly if any changes in the offshore shareholding. Warren, what I, what I can tell you, and Andy can maybe add to that, is like in the previous financial year, 6% of our shares were held outside of South Africa, and in the past year, it's 5.8%. I don't know if there's a movement within the shareholders, but there isn't a big uptick from the country itself or outside of South Africa. We have a question from Esmé Botma from Oyster Catcher Investments, asking what percentage of our portfolio now consists of SEP-regulated products? Esmé, hi. In this current set of financial results, it's 57% SEP based, and obviously 43 non-SEP. Thanks, Andy. Then we have Gina Copping from Allan Gray, that wants a split of the SEP products for by segment. I can maybe help with that as well. Gina, if we look at our largest consumer, they are predominantly non-SEPs and have a very small portfolio of SEP. Only the stronger Panado, or bigger formulations of Panado, stronger formulations. In OTC, about 2/3 are SEP and 1/3 non-SEP. In the prescription division, it's about 80% SEP and 20% non-SEP. Just a reminder that that division have all the instruments and the ophthalmology as well as dermatology products in it, and the hospital business is very much 50/50. It seems like there are no further questions. Let me just make sure. Yeah, that is all from my side. There seems to be, Judith, one that came back on the chorus call from Charles Boles from Titanium Capital. We are happy to take that now. Thank you very much, ma'am. Charles Boles of Titanium Capital. Please go ahead. Thanks. Thanks, Andy, Director. Good set of results. I had a couple of questions, if I could just shoot through them quickly. You, you said that ARVs is about 8% of prescription turnover. If, if you were to lose that, how big a factor would that be in terms of sort of factory underrecoveries and sustainability? How big a an impact would that be? Yeah, Charles, good morning. It's not a big impact anymore, you know, 'cause we've reconfigured that Wadeville facility to do other oral solid dosage forms. We do some allergics there, some Panado, and we're bringing back, some Myprodol, some Genpain, some Adco-Dol production into that factory. All of... on the tablets and capsules, not a big, problem for us. The triple combination that we sell into the private sector, we actually get from an Indian partner, so we import that in any event. Okay. We do some liquids on the tender, but we've brought in a large amount of other liquids into the factory now, from a contract manufacturer. Again, I don't think this will have a significant impact on, on the factory, but we'll still keep servicing the private sector. It's really the government sector where we, we lost a huge chunk of business. Got you. On BioPlus, so a curveball question. I would have thought with the proliferation of energy drinks, which would seem to be a, a substitute or an alternative to BioPlus, that that might have pressured BioPlus, and yet it's still growing quite strongly. Maybe just some understanding of that? Yeah. You should come and get a job here in marketing. My people keep telling me our BioPlus drinks are gonna do so well in the market. Look, the, the drinks is a very small component of the BioPlus brand, you know, we, we don't go up against the real big guys like Red Bull and Monster and, you know, those guys. It's very much just a convenience factor of where BioPlus drinks can be available. They are sold, but they're a very small part of the almost ZAR 300 million of BioPlus. The part of BioPlus that's really growing are these, what we would call convenient formulations. If you go into a forecourt store or a point of sale, you often see these BioPlus sachets, which people can take on the run, and that's effectively just what the BioPlus syrup you used to find in bottles, now in a much more convenient form. Those are the ones that are the formulation that's causing the growth in that brand. I'm still a little surprised that somebody goes into a forecourt where they might have bought a BioPlus before, they now could buy an energy drink, and it gives the same caffeine or a kind of energy kick. I'm interested that it's continued to grow. Yeah, look, you know, BioPlus has huge brand equity, as you know, particularly amongst youngsters when they study, varsity students when they study, so the brand equity kind of remains. Don't forget, if you're selling a sachet of BioPlus, there's a, there's a huge price differential between buying a can of expensive drink and buying a BioPlus sachet. That also, I think, helps. Then during COVID-19, we didn't sell a lot of BioPlus because effectively people weren't out and about. Ah, okay. Whereas now, people are out and about, they come home from a party, whatever it might be, and, you know, go, BioPlus is one of the go-tos. That's useful. Thank you. codeine, is, is there any, any regulatory still on the radar, or has that gone quieter? Any issues there that-- to think about? Yeah, there, there are still issues to think about this. You know, SAHPRA's been looking at the scheduling status of codeine for a few years now. The focus turned in the last year towards the use of codeine in patients under the age of 12. The industry had to submit the information to SAHPRA to support the use of codeine in, in children under the age of 12. There's not a lot of good clinical data to support the use of codeine in children. SAHPRA has now asked the industry to provide periodic safety updates, you know, in case anything goes wrong with administering codeine to children, and the industry is now doing that. That's, that's been the only part of the codeine focus over the last year. Would I be reading you correctly, that it's still leaning towards ensuring responsible dispensing rather than a banning? Is that a fair assessment? Yeah, look, one never knows what a regulator is going to do, right? They have to act independently. Certainly from an industry perspective, we believe that if there is responsible sale of codeine, a responsible recording of who purchases the codeine, then it can be properly controlled and be given for people who need it, for, for the right conditions. We will continue to support that. We, at Adcock Ingram, we restrict our sales now to only certain, big corporate customers because we know they've got the right controls in place to sell the products. I'm talking particularly of the cough syrup. And we are also still working on what's called a Codeine Care Initiative, where we effectively are educating and trying to help pharmacists into making sure that there's responsible sale of these products. Got you. Just two other questions, if I may. The 1st one is your, your Indian joint venture. You answered that, and that's useful. I see it's got a carrying value of ZAR 471 million, so it's, it is quite meaningful. Is that, is that kind of locked in in future? In other words, they are a contract manufacturer, it's, it's a, it's a good partnership, you would never have a reason to exit or realize that? Does that lock you into that manufacturer? I mean, could you ever exit that investment if you had to, or is that not a consideration? Charles, we can exit it, although I think it would be unlikely. You know, they, they do a good job on quality, they do a good job on price, and they do a good job on service. Okay. I think we'd be unlikely to ever liquidate that investment, but certainly, we could. The benefit of being a shareholder, of course, is, you know, as a customer of that factory, you know, we get treated well. I think it would be unlikely we consider exiting that unless supply chain issues go completely awry in India. In other words, that getting our hands on certain products with certain active ingredients in India becomes a problem. We try and mitigate that by making sure that we can at least manufacture the products here that we manufacture in India, albeit on much lower scale. Got you. Just linked to that, you had an unusual shareholder that popped up on your register, Natco, which seems to be controlled by a business out of India. Is, is there any link to your joint venture partner there, or is it a completely separate party? Yeah, Natco is an Indian pharmaceutical company. I think they have operations outside of India as well. They have no relationship with our contract manufacturer, and we have no commercial relationship with them. Got you. My last question, if I may. You alluded to products that are growing. One of the questions or concerns, I suppose, has been with the Adcock portfolio, is that a lot of the you've got, if I can use older molecule type formulations that might be dated or become more competitive. How do you monitor what portion of your portfolio is in growth, and what is at risk of becoming more commoditized, if that makes sense? Yeah. No, it does make sense. The data that we get from IQVIA, which is the company that measures the pharmaceutical industry, and another company called Circana, which does the FMCG sector. Okay. that goes all the way down to product level, and in fact, down to regional level. You can see in every part of the country how well you're doing. Okay. What one tends to find is that in the generic space, particularly prescription generics, there, these brands do get commoditized over time. In fact, we discontinued 3 generic products in the last year because we, we simply can't make money out of them, given the proliferation of people in the market selling those products. Okay. If you, if you stick to big brands, and I don't mean big, I, I just mean in terms of equity, not necessarily in terms of size. In South Africa, those products are difficult to commoditize. If you think of a brand like Panado, you know, there are dozens of Panado generics out on the market, including good brands that other companies sell, but yet the brand equity is there because there's a trust in the brand. The real issue is to get the brand reinforced in the minds of the healthcare practitioner and the consumer, and then you can still, you know, get your price and get your brand equity. This is gonna sound like a completely non-pharmaceutical comment, but when you look at a product like Panado, and you think paracetamol is paracetamol, kind of more or less, I mean, a bit simplistic, but it's interesting that, that a fairly standard product has that much brand equity, but it seems to. Yeah, it is interesting, but it's not only a factor of the brand, you know? Panado is effectively Panadol in the UK, so it's, it's effectively the same formulation. Yes. If you, if you go and buy 6 paracetamol products off the shelf in any pharmacy or shop, right, or wherever you might go and open them, you'll see that these things are pressed differently. In other words, in the, in the, in the tableting machine, some of them start giving off a powder, you know, so they don't stay together as well as they should. Okay. Some of them are more difficult to swallow because our product is, is polished. There, there is a reason why people would go to a brand like Panado. It looks better, it swallows better, and it's trusted. It works. I got you. Thanks so much for all the help. Again, well done on the results. Good set of results. Thanks, Charles. Appreciate it. Thank you. We have no further questions on the telephone lines. Judith, thank you. I think we may be done, Dorette? There's, there is one more question. Sorry, Andy, just before lunchtime. Judith, so actually to Richard, from Protea Capital Management. Your question was answered on the Natco investment that you also raised. Then we had the last question from Gina, from Allan Gray. Two questions: Are there any acquisitions planned for the next year? Do we have any further thoughts on the developments of NHI and the impact on the company? With that, we will conclude. Thanks, Judith. Okay. Thanks, Gina. Yeah, look, in terms of acquisitions, we are still looking where we can to bolster our non-price regulated portfolio, so effectively trying to put products into our consumer division. Mainly, we are looking at personal care and home care at the moment. There's nothing on the table at the moment, certainly we will continue to search in the private company sector of the market over the next year. Then on NHI, you know, we are obviously involved with discussions with the rest of the private sector in terms of making representation to government on how NHI can be rolled out. As a company, Adcock Ingram remains in favor of universal healthcare coverage. We believe that everyone has a, has a right to healthcare. We don't believe the impact on pharmaceuticals is as material as it may be on the other sectors of the private market. We are... I don't want to say going with the flow, but we are giving input and watching where we might end up. We do believe that there are significant questions to be asked around how NHI will be funded, whether the public sector infrastructure can cope with NHI, and also on the ability of people to access insurance outside of NHI. Those are the sorts of issues we are making representation to government on, in collaboration with all private sector players. Judith, thank you. We appreciate everyone dialing in. We wish everyone a good day, and thanks also for your very able assistance. Thank you very much, sir. Ladies and gentlemen, that concludes today's event. Thank you for joining us, and you may now disconnect your lines.