Alliance Pharma plc (APH) Earnings Call Transcript & Summary

Thank you very much, and good morning, everybody. I'm Pete Butterfield, CEO, and I'm here online with Andrew Franklin, our CFO, this morning. So firstly, I hope you're all keeping well, and thank you for attending this analyst meeting. Before we start the presentation, can I just check that you've all got copies of today's slides? And if not, you can find a copy on the Investors section of our website. So I'm delighted to be able to share with you our 2020 results this morning, and despite the challenges thrown up by the COVID pandemic, I'm very pleased to report that the business has developed strongly. Robust underlying trading and strong pretax cash flow have been complemented by a strong underlying development of the business, including great progress with Kelo-cote, our #1 brand; the Nizoral integration now being substantially complete; and the successful completion of our second largest deal ever with the exciting acquisition of the Amberen brand at the end of the year. Operationally, we're also able to keep products in stock and quickly pivot into remote working. And as a result and most importantly, we're able to keep our teams across the world safe and well. And today, as always, I'm pleased to be joined by Andrew, who's going to take you through the financial highlights of 2020 shortly. And in terms of the content for today, we have a short presentation for you that you see it takes around 0.5 hour just on the business, and the contents of which are outlined on Slide 3. Turning to Slide 5. We'll move through the disclaimer and everything. For those of you less familiar with the Alliance story, I won't labor too long on this, but just to let you know, Alliance is an international health care business. We're growing quite quickly. We have 80 products around the world; and over the past 5 years, we've grown by around 23% CAGR in terms of revenue. Nearly 3/4 of our revenue now, if you include the Amberen deal because I think it's sensible to look at that given the timing of that, but if you look at our business, 3/4 of our revenues derive from clinically valuable Consumer Healthcare products with the remainder being generated from a range of prescription products predominantly sold in Europe. We're highly profitable and cash generative with healthy returns and good free cash flow as we choose to outsource all capital-incentive activities. In terms of our portfolio, we've seen great growth from our Consumer Healthcare business, over 29% CAGR, and we'll take you through this business in more depth shortly. Slide 6 outlines our vision and our mission. So our vision remains unchanged: to be a leading international health care business built around products that are clinically valuable for patients. And our mission is to create partnerships that unlock potential for brands, businesses and people around the world. So with that in mind, I'd like to now hand over to Andrew to take you through the highlights of the year from a financial standpoint. Hopefully, you're online, Andrew.

I am indeed, Pete. Thanks so much.

Great. Thank you.

And good morning to everybody. I'd like to move to Slide 8, please. As Pete said, we're very pleased with the strong financial performance of the group despite the challenges thrown up by the pandemic, with both profits and cash flow being ahead of last year. And we also ended the year with a key acquisition in Amberen. This acquisition, Alliance's second largest, will bring additional scale and focus for operations in the U.S. Returning to the year. Sales were down by only 5% at GBP 137.5 million. Our Consumer Healthcare brands continued their strong performance with sales up 1% at GBP 93 million. Key highlights in this portfolio includes: Kelo-cote, our scar reduction product, with sales growing 12% to GBP 34.7 million, where we saw further strong demand in China from the second quarter onwards as local lockdown restrictions eased; and also for Nizoral, our medicated anti-dandruff shampoo, whose sales grew 4% to GBP 21 million. And China continues to be an important market for Nizoral and a future growth driver for this key brand. Revenues from our Prescription Medicines portfolio were GBP 44.5 million, down 14% from last year, as hospitals preserved capacities due to COVID-19. However, we did see a modest recovery in the second half with revenues up 7% on those for the first half. And we anticipate demand will return as local restrictions are eased and the provision of routine health care treatment normalizes. The small margin mix improvements and lower operating costs resulted in an underlying EBITDA decreasing at a rate slower than net of sales at minus 2%. And after allowing for lower interest and financing costs, PBT was up 2% at GBP 33.5 million, with underlying basic EPS also growing 2% at 5.21p per share. We're also pleased to announce that after canceling the 2019 final dividend owing to COVID, we are proposing a final dividend payment of 1.074p per share for 2020, taking the total dividend for the year to 1.61p. This final dividend, subject to approval at our AGM in May, will be paid on the 8th of July to shareholders on the register on the 11th of June. Cash flow was very strong, and we generated free cash flow of GBP 34.1 million for the year, the second half cash flow being significantly stronger than the first half, bolstered by underlying business performance and favorable movements in working capital. Following the drawdown from our existing credit facility to fund the acquisition of Amberen, net debt rose to GBP 109 million at the end of the year. As a result of this acquisition, group leverage increased to 2.43x, which is comfortably within our covenant limit of 3x. And in the absence of further acquisitions, we expect leverage to decrease to below 2x by the end of this year. Moving on to Slide 9. As mentioned earlier, our total revenues were down only 5% from last year. Group revenue and profit were minimally impacted by exchange rate movements with sales benefiting by approximately GBP 300,000 on a constant currency basis. Gross profit decreased by 4% versus the previous year, with gross margin increasing 0.5% to 60.2% of revenue due mainly to favorable changes in product mix. Operating costs for the period were 4% lower than last year at GBP 42.8 million due to a reduction in spend through the cancellation of deferral of expenditure e due to COVID, partially offset by increased marketing costs to support investment in the consumer health brands to drive continued long-term growth. For the year, operating costs as a percentage of sales were in line with that of last year at 31% of sales. Due to the lower operation costs and modest margin improvement, underlying EBITDA decreased by only 2% at GBP 38.6 million and represented 28% of sales, 1% higher than last year's rate of 27%. Finance costs were down GBP 1.3 million at GBP 3.3 million, reflecting both a lower level of borrowings in the year and a reduction in interest rates. And as a result, we delivered an underlying PBT of GBP 33.5 million, up 2% from last year, which translates into a basic underlying EPS of 5.21p, 2.4% higher than last year; and diluted EPS of 5.14p, up 3% on the previous -- on the prior period. Moving on to Slide 10. This shows our balance sheet in summary format and with our overall net assets increasing by GBP 7 million to GBP 281 million. The key movements in the balance sheet relate to an increase in intangibles of GBP 84 million due primarily to the acquisition of Amberen, which is partly offset by the annual amortization charge for the Prescription Medicines portfolio, which is now being amortized over a 20-year period, together with an associated impairment charge, both as announced at half year; a decrease in working capital of GBP 5.4 million, which is made up of a GBP 6 million reduction in receivables, reflecting the timing of sales early in quarter 4 than the period in the prior year, and an increase of GBP 7 million in payables as a result of holding higher inventory and the phasing of payments around year-end. These are partially offset by an increase in inventories of just under GBP 7.5 million, which we technically provided to mitigate against COVID challenges, particularly during COVID challenges and any disruption in the wake of Brexit. The year-end balance also includes GBP 2 million of Amberen inventories. Two other points to note: the increase in deferred tax related purely to the acquisition accounting for Amberen and the increase in net debt of GBP 50 million follows the drawdown of GBP 83 million to fund the purchase of Amberen. Moving on to Slide 11, which just shows the cash flow and the net debt movements for the year. Firstly, on the left-hand side, cash flow. Our cash flow for '20 was very strong at GBP 46.4 million, which reinforces the very good cash generation of the business. As mentioned, we benefited from positive movements in working capital in the second half of 2020, which we expect to reverse this year and will constrain the level of free cash flow generated in H1. But after taking accounts of tax, interest payments and CapEx, free cash flow for the year was GBP 34 million, 17% higher than last year. Secondly, net debt and leverage. The right-hand chart shows the movement in our net debt during 2020. We started the year with a net debt of GBP 59 million and a leverage of 1.48x. And in the year, we generated cash from operations of GBP 46 million. And after allowance outflows for tax, interest, CapEx and the 2019 interim dividend, our net debt would have been GBP 27 million. We used our existing credit facility to fund the Amberen acquisition, which increased our net debt to GBP 109.4 million at the end of the year. This increased our leverage to 2.43x, and we expect leverage to decrease below 2x by the end of the year in the absence of any acquisitions. And let's move now to Slide 12. And I'll finish this section with these charts that show the continued strong progress made by Alliance over the past 4 years. The charts on the top row illustrate an evenly leveraged P&L with sales, EBITDA and PBT all growing at a 3-year CAGR of between 11% and 12% and the bottom row, which shows continued progression of EPS, up 9%; dividend, up 7%; and free cash flow, up 16% for 3-year CAGR basis. I'll now hand back to Pete, who will take you through the next part of our presentation. Back to you, Pete.

Thank you, Andrew. So in the next section, what we'll do is we'll dig into performance in a little bit more depth. So turning to Slide 14. 14 shows the performance of all the 3 main brands, and we're focusing more debt, obviously, on Kelo-cote, Nizoral and Amberen in the following slides. But as Andrew has mentioned, good performance in Kelo-cote and Nizoral. It's worth also noting that Amberen experienced strong growth throughout 2020 pre-acquisition through new distribution wins and also our product launch as well. And Kelo-cote and Nizoral has been driven strongly by the recovery in the Chinese market, which recovered strongly in the second half of the year. So we'll come to that in a little bit more depth. I think it's worth noting on the right-hand side of this slide, the performances of the other consumer brands. Now within those, we had a mixed performance. And if you look at the 2 of the largest, there were 2 key drivers behind the mixed performance. So it was always going to be a tough year for Vamousse, which is our treatment for head lice in the U.S. and the U.K., so naturally had a challenging time. That was down 14% due to basically home schooling and children not mixing and social distancing. However, it's worth noting that the market actually dropped 28% over the same period. So Vamousse has benefited from further distribution gains at the beginning of 2020, also some refreshed branding, and it's managed to increase its market share, moving from -- to just over 10% from 8.7% a year ago, so a couple of percentage points there in terms of market share. What's happening in that market is key retailers are indicating they're going to pare down some SKUs moving forward. But Vamousse continues to retain distribution in the majority of mass accounts, and it's really well placed for when lockdowns ease over the course of the year. So that is very much a brand with the U.S. exposure, also a little bit in the U.K., but certainly, U.S. is the home market for that. The other couple I want to pull out. One is MacuShield, which is our eye care supplement. And our revenues were down in 2020, although the majority of this impact is due to distributor stocking in Ireland due to Brexit and also a distributor change in Ireland, which happened in 2019. And that washed out through the course of the year. I'm pleased to say the brand remains in good health with underlying in-market sales up around 2%. And we've also just launched that brand into China through cross-border e-commerce at the end of the year, and that's beginning to show some very promising results for 2021. So we look forward to some growth on both Vamousse and MacuShield as lockdowns ease and we come out of that. I think it's also worth noting a high point in that portfolio, which is Ashton & Parsons as well, our teething range. That was at 27%, thanks to both distribution gains and also a new SKU launch. And this is now the U.K.'s #1 teething brand. And we'll talk a bit more about that product development a little later on and product development in general. As reported, our Prescription Medicines were impacted a little more, overall down 14%. This was particularly felt in secondary care in the U.K. and Europe, which is where our portfolio is of Prescription Medicines, as hospitals preserve capacity for COVID-19. We were, however, encouraged with the way the portfolio began to rebound following the partial lifting of restrictions at the end of the year. So we look forward to restrictions being lifted. Now let's look at Kelo-cote in a little bit more depth on Slide 15. So for those of you not aware, Kelo-cote is a range of clinically valuable silicone-based scar treatment, which we acquired at the end of 2015. Let's start with the market. The market's in really good health, around GBP 330 million ex-factory prices, and that's growing at 6% per annum. Pleased to say the brand has very high awareness and usage in China, which is the world's largest market. So we've broken out the markets for you there in terms of market share. And it's those top 10 markets that are really driving growth. China, we estimate, had a growth of 18% CAGR as a market. It's one of the fastest growing. And in 2020, we expanded our cross-border e-commerce offering. We believe that there's significant opportunity to continue to benefit from the positive demographic trends of a rapidly growing middle class population, rising demand for cosmetic procedures and also C-section birth. So we're very, very nicely positioned in many of those markets, and we think there's a significant benefit to drive growth through there. And as such, we increased our potential sales up to GBP 75 million up to 2025 through a combination of both market growth, increasing presence through cross-border e-commerce, some great distribution partnerships and also introduction of new product development, which is well underway. So quite pleased with the way Kelo-cote has weathered the storm, and there's more to come from Kelo-cote moving forward. On Slide 16, we turn to Nizoral. Again, for those of you who aren't aware, Nizoral is a ketoconazole-based, medicated anti-dandruff shampoo that we acquired from Johnson & Johnson in June 2018; again, performed well despite COVID predominantly down to 2 factors: doing very well in China; and also, we've managed to launch our first-line extension, a new formulation, which has been launched successfully in China. I mentioned that back in September. That generated over GBP 1 million of sales in the first few months in that territory, which is really, really promising. I'm pleased to say the integration of the brand is almost complete. So you'll remember we had a 2-year TSA agreement with Johnson & Johnson for this brand. It has taken a little longer, thankfully no part to COVID, and that's slowing things up a little bit. However, we are almost complete in terms of getting that across the line. So in terms of marketing authorizations, the only significant one left to transfer is China. And the reason for that is China has been through, as a country, a significant overhaul of its marketing authorization system, so we have to wait for that to become clear before we can complete that. So that should be done by the end of the year. We've signed up every single distributor. All those distribution agreements are now complete. And despite the delay in China, we've developed really strong some partnerships with our lead distributor, and it's beginning to show signs of great potential. We've also signed a new and exciting partnership in India and are quite encouraged about the potential early signs of growth in this market as well. And our target in terms of medium-term sales potential out to 2025 remains the same. We haven't changed that GBP 30 million plus for Nizoral, and we'll continue to invest in that brand moving forward. Turning to Amberen, which is on Slide 17. This is our newest Consumer Healthcare product, which we acquired on the 29th of December. Similar magnitude in terms of size to Nizoral, so pre-acquisition sales of around GBP 20 million. And Amberen, again, clinically valuable. It's a clinically valuable treatment for the symptoms of menopause. It's available over the counter in the U.S., which is its home market. And again, like Nizoral and like Kelo-cote, Amberen is exposed to a growing market and favorable demographics with over 41 million women going through menopause at any time in the U.S. alone. And just to give you an idea of the sort of size of category in the U.S., it's estimated in terms of menopause supplement to be around $130 million in the U.S. and growing anywhere between 4% and 6% per annum. The brand has great awareness. The Amberen orange box, the menopause relief SKU occupies the #1 SKU in the U.S., which is great. And we'll be continuing to leverage that as we move forward. For those of you unfamiliar with the products under the brand, Amberen is a proprietary formulation of bioactive antioxidant called succinates with amino acids, minerals and also vitamin E. It's been launched in the U.S. since 2007 but only really gained retail expansion in a significant way from 2015 onwards, and they've grown very nicely since then. And throughout 2020, before we acquired the brand, Amberen generated sales of just over GBP 20 million, and that was growing at 17%, thanks predominantly to good distribution gains and also some strong marketing, again, of that brand. So it's given us really good value in the U.S. in terms of coming in alongside Vamousse and allowed us to double down in what is the largest consumer healthcare market in the world. And I'm really pleased to report we're making very swift progress with the integration of this brand into Alliance in 2021 and is off to a very pleasing start. So we have extensive rights to the Amberen brand as well it's worth saying and we're also assessing launches into other territories throughout our comprehensive routes to market. So our investment thesis is very much behind Amberen and -- in the U.S. predominantly, but there's an opportunity to grow outside of the U.S. market. And we just received approval for Canada over the last couple of weeks, so yes, plenty to go out with Amberen. And I think you're seeing both market growth, new product development and some international launches seeing growth from around GBP 20 million today to potentially over GBP 35 million in the next 4 years. So yes, very pleased to get that across the line right at the end of the year. Those are the 3 main consumer brands that we're going to talk about today. On Slide 19 -- or Slide 18 but 19 in the deck, just want to turn to our Prescription Medicines. So as far as our Prescription Medicines go, as we've highlighted again, this was a mixed performance across the board but ultimately down year-on-year due to hospitals preserving capacity across Europe, where the majority of this portfolio is concentrated. And whilst revenues were also adversely affected by the pandemic due to delays in routine treatment, we do expect demand to return as restrictions are eased. But it's very different depending on which product you look at. So I just wanted to call 2 out, and these are 2 that we selectively promote on a relatively low level, both Hydromol, which is a comprehensive range of emollients, which is described the majority group primary care. Hydromol declined slightly 6% off last year, but it's actually, again, gained market share and is now the U.K.'s third largest emollient brand, and it started 2021 well. Then we look at Forceval. Forceval is a unique formulation of vitamins and minerals, which for many years has been the mainstay of the NHS' treatment for malnutrition. That actually grew 11% last year, and that remains a significant revenue generator for us. So it very much depends on which product that you look at. And some have grown. Others have gone back a little bit. But as Andrew stated, we're really encouraged by the early signs of recovery when lockdowns were eased and back in quarter 3, quarter 4 last year. And we remain well placed when this repeats, hopefully later in this year and not too long now, we hope. So that's an overview of the main elements of the commercial performance. I now want to turn and talk to you about our strategy and our business. I think it's important that you understand what underpins our growth. And turning to Slide 20, there are 4 key elements to our strategy: firstly, organic growth; secondly, acquisitive growth; thirdly, our people and our culture; and finally, our sustainable business practices. And I'll take each of these in turn. So let's start with organic growth on Page 21, and there are 3 strands that we're focusing in on to continue the growth from our current portfolio, predominantly in our Consumer Healthcare brands. The first one is something called marketing excellence. And this is a structured rigorous process that we rolled out for Alliance over the last 2 years. We have 13 brands that currently fall into this process, which aims to give a deep understanding of our customers, their influencers and ultimately, identifying core insights for the growth of our key brands within the portfolio. The second is developing our innovation capability. I've touched on this in the last 2 presentations, but I just wanted to highlight 3 recent examples of making sure that our brands remain relevant to our consumers. First one is the Ashton & Parsons teething gel. It is the first innovation for over 150 years on the brand. And you'll be aware of the brand in its powder formulation, but we launched the teething gel formulation in 2019, and that has gained significant market share, which is a real success story for us. MacuShield Chewables derived some deep consumer insight and direct feedback from customers as an alternative to the capsule formulation. And our latest line extension for Nizoral as well, that's the other one I want to call out, Triatop as it's called in China. That's got off to a great start. And these are all homegrown examples of new product development, and there'll be many more of these coming from Alliance moving forward. And we've just hired a new Head of Innovation and Development into the business this year with a key agreement to ensure that we continue to harness consumer feedback and use it effectively to develop our key brands efficiently. And then finally, I just want to touch on the -- recognizing the rise of e-commerce within our business, just to give you an idea of the sort of proportions. E-commerce accounts for around 1/4 of our Consumer Healthcare business; and this year, we'll be appointing a Head of Global E-commerce, along with rolling out the new products -- new programs to our global marketing teams. That's becoming increasingly important for various different products and certainly as we've gone through COVID as well. So there are 3 strands there in terms of underpinning our organic growth. If you move to Slide 22, 23 in the deck, I also just want to touch on acquisitions as well. Obviously, Amberen was the last one that we did. They are and will be an important element of our strategy. In 2020, we reviewed over 90 different opportunities. COVID stalled a number coming through in the first few months, but by the end of the year, the runway was back to where we expected it to be. And having reviewed those 90 ultimately, that ended in the Amberen deal for us. We've set out in the table the last 5 significant deals we've done, the price we paid; and we've also stated sales at both the acquisition point and sales for 2020. Now 2020 will be suppressed somewhat due to COVID, but you can see significant growth from all the deals we've completed in this table. And we hope that Amberen will be no different. And I want to talk to you a little bit more about the business in more depth in Slide 23. It really has been a challenging year, but we performed strongly on the people front, I'm pleased to say. We have gained Great Place to Work status at the first attempt in both the U.K. and China with a Trust Index rating of 79%. Now there are over 10,000 companies in the survey. And to put this into context, we only scored 6 percentage points off the 25 companies, which are the best of the best across all industries. So together on the first pass, has been exceptional for us. We've onboarded over 50 new people into the business. We've gained a new office and a new team in L.A. following the Amberen acquisition. We managed to stay connected through COVID. We invested significantly pre-pandemic in Microsoft Teams. So that was very much in the way that we work anyway. And we're constantly surveying the team to understand the best ways of working, moving both throughout the pandemic and also moving forward as lockdowns begin to ease. All of this and we've not made a single redundancy. We've not made use of any government furlough schemes or had to rely on any external sources of finance to get us through this tricky period. On the contrary, our business will exit stronger this year than it went into the pandemic on the people front. So now I'd like to turn to the fourth pillar, which is building a sustainable business. We touched on this on the people side, so I won't labor on that. But I also want to talk a little about our products and how we do business. So product quality and safety is fundamental to our license to trade, and it's based in the way we do business. And as a heavily regulated business with a strong pharma heritage, we've been able to leverage this in an ever more highly regulated medical device and OTC segment. Just for example, each year, we take around 4,000 calls per year into our medical information team alone, and those are all handled professionally throughout the Alliance state. Our suppliers are also highly regulated. So we audit them all the time. That said, in 2020, we've also kicked off a comprehensive Know Your Supplier program using a third-party external agency as part of our efforts to further improve and streamline our supply management and associated business assurance activities. Our leadership and governance in 2020, we rolled out a comprehensive package across the board on business ethics and compliance training. Our Board is fully independent. We have also set up a newly formed ESG committee as well. We're upgrading our headquarters at Avonbridge House in Chippenham, looking to both manage our carbon footprint while also continuing to maintain the heritage of the important listed building. And as far as charitable giving is concerned, 2020 needed to be a standout year due to the challenges felt by many as a result of the pandemic. We donated over GBP 150,000 to causes local to our international offices directly affected by the COVID pandemic, some of whom would have struggled to keep going without our donations. We're pleased to say we're also able to help frontline NHS staff in the U.K. with donations of Hydromol and Lypsyl to ease dermatitis associated with the continuous exposure to PPE. So looking back, it's been another very busy year for the business, and I'd like to now look forward though and look at the potential within our base business. And Slide 26 aims to give a flavor of this. Now if you take into account the potential of Amberen, Kelo-cote and Nizoral, and you assume a reasonable high single-digit growth from our consumer business and low single-digit growth from our prescription business, that would yield a revenue line of anywhere between GBP 225 million and GBP 250 million from just under GBP 140 million today, so significant growth potential. You keep the PBT margin similar, that results in around GBP 50 million to GBP 60 million of profit before tax and very, very minimal debt within the business. And that obviously is without factoring in any further acquisitions. So significant runway for growth within the business, 3 key brands that are exposed to strong demographic and are clinically valuable and strong products in their own right. So just bringing the formal part of the presentation to close, summarizing on Page 28. I think our 2020 results bear testament to the robustness and resilience of our portfolio, our business model and our people. I think noteworthy achievements include the successful completion of the Amberen deal, establishing us firmly in the largest consumer health care markets in the world; and also our Chinese business continues to perform strongly, and it delivered really good growth despite the pandemic, and we've generated very strong cash flow as a result of trading. We now have several large brands within fast-growing markets with favorable demographics, and we expect further strong cash generation by the end of 2020. And I'm pleased to report that '21 has got off to an encouraging start. So that's it for the formal presentation. I'd like to thank you all for listening. And with that, we'll hand back to the moderator and open the floor for any questions.

[Operator Instructions] Our first question comes from Andrew Whitney from Investec.

Just 2 questions from me, please. The first one was on future brand potential, the Kelo-cote one, GBP 75 million in 2025. I know only recently, I think you punched it up to GBP 50 million. It's now GBP 75 million. That feels like Kelo-cote is going really well. Is there any limitation as to how big that product can get? It's exposed to a growing Chinese market. What's the -- are possible on Kelo-cote is one. And could there be later upside pressure to that GBP 75 million is one question. And then on the other question, 3/4 of your products in that consumer health bucket, and that's got slightly different dynamics to the Prescription Medicine portfolio. Will the consumer health products ultimately just dilute out the Prescription Medicines piece? And are you -- at some stage, will you be the right owner for those 2 different buckets of products?

Yes. Very good questions. So let's take them in that order, Andrew. I think Kelo-cote itself, obviously, has had a very good year despite the pandemic pressure. The market dynamics are favorable for Kelo-cote. And it's surpassed all expectations when we acquired it. So we had a business of around GBP 7 million when we acquired it in 2015. So -- and we said, look, we aimed at GBP 20 million. Obviously, that's grown to GBP 30 million to GBP 50 million to GBP 75 million. We genuinely see good potential through both our partnerships, but also through cross-border e-commerce channels into China. The market's growing itself, so it's growing within China. It's around 20% per annum so very, very strong growth out there. And we feel that -- we like to set ourselves realistic targets as well. So we feel GBP 75 million is the right target for now, and we're -- that's very much what we're going to be aiming for. And I think we're seeing some really good take-up on cross-border e-commerce as well as domestic sales to our partner out there. So the demographics are right. The product's right. We've got some good new product development coming through, too. And also, it's growing in other areas of the world as well, so it's not just about China. We have good exposure in Indonesia, in India, Germany. So these markets are also growing, too. So yes, it could be a significant value driver for us in the future. And then in terms of the Prescription Medicines and are we the right owner for those, categorically, at the moment, yes, we are. They are brands that we have worked with for several years, and I think they will return to a decent sales line this year as lockdowns are lifted. But in terms of the portfolio mix, what's happened simply is the Consumer Healthcare business is growing very well, and we've just done another consumer health care acquisition. And if you look at the last 5 on that chart, you'll see the last 5 have all been by Ametop, which is a smaller prescription medicine. They've all been Consumer Healthcare brands that we managed to grow very, very well. But the concentration of that portfolio is very much U.K. and a little bit of Europe. So we've got very good coverage there and the skill set to run those. So right now, that portfolio is very valuable to us.

Our next question comes from Charles Weston from RBC.

The 3 questions, first of all, on Kelo-cote, please. H1 and H2 performance was obviously quite different. Should we be thinking about H2 as a base level for 2021? Or were there one-off issues in H2 like stocking issues? And on the subject of Kelo-cote, in terms of that GBP 75 million target, is there anything we should be thinking about in terms of the shape of that? Are there any specific catalysts that could set things up? Given that had one a and b, should I just leave you with that to start with?

Yes, fine. In terms of specific catalysts, there's nothing in there that we are not doing already. I think good brand management, good distributor management as well. Working in cross-border, too, has been something that channel is growing very nicely. And we're very nicely placed. And actually with cross border, we're starting to use that in other areas of our portfolio as well. We just launched the MacuShield through that quite recently. There are no specific catalysts or any launch events or anything like that. It is simply doubling down on what we're doing now. In terms of H1 and H2, I don't have those splits in front of me. So Andrew, do you have your figures there for H1 and H2 for Kelo-cote?

For Kelo-cote, well, we can certainly see Kelo-cote growing in the second half in this year, 2021. I don't know exactly by H1, H2 at this point. So that will be the key -- one of the key areas that we're growing in for '21 over '20. But also you've got in there coming now is Amberen. So we'll get the full year impact of Amberen, too, which wasn't in the prior period.

So just to clarify, what I meant there is, in 2020, you did sort of GBP 14 million in the first half and over GBP 20 million in the second half. So just thinking of the base for next year, just the seasonality of that product.

Understood, Charles. Understood. The first half of the year, clearly, was suppressed due to COVID in Asia Pacific and China. So you start to see that unwinding a little bit in the second half. I think in terms of guidance and where that's going this year, it's -- we would hope to see that trajectory continue into 2021. China has rebounded very, very well domestically and also cross-border. So that is the key, as you can see from the slide, 25% of the global market but also growing quite nicely, too. So yes, we do see that coming through into 2021.

Second question on Prescription Medicines, actually, something perhaps a little bit similar. Again, you saw a step-up in H2. So should we be thinking about that as the sort of base level of revenues to think about for 2021, that -- sort of the GBP 23 million you did in the second half rather than the GBP 21 million base in the first half? And can you get back to 2019 levels on that Prescription Medicines bucket?

Yes. Good question. Whether it's GBP 21 million or GBP 23 million, Charles, I -- your guess is as good as mine. But it all depends on how lockdowns are easing. We've had a good start for the first couple of months, actually, here in the U.K. And we are starting to see some signs of growth in that portfolio in particular. We, I think, are holding that prudently at a plant level for this year. It could go up. That's about as much color as I can give you on that, depending on how things progress. So I don't mean to be unnecessarily vague on it. It's all simply we can't tell on that. Can we get back to 2019? I think that could be a challenge, but there is some -- there are some products in there still with some good potential in them although not as large a growth as the Consumer Healthcare brands that you see.

Okay. My last question is on the acquisitions. Of the 90 M&A opportunities you reviewed, how many did you go for?

So we went for -- I think we went for around 6 in terms of offer stage. And then we got through -- I think we have 2 or 3 very, very close at the end of the day. So it's not an unusual run rate for us then. I think on a normal year, now whatever a normal year is, we usually screen seriously just north of 100. So we're probably down 20% in what's coming through the pipeline. But you've got to be very careful with that number because it will depend on size and shape and everything else of brands coming through. So yes, we're, yes, certainly very well placed having done 35 deals now in 20 years. It was great to get Amberen across the line right at the end of the year. And as Andrew said, we'll get the full benefit of that this year. The integration is going really well as well. And yes, that's quite a swift integration process, so very pleased with that.