Ascendis Health Limited (ASC) Earnings Call Transcript & Summary

Okay. Good morning, all and apologies for the slightly delayed start. But we're trying to give everyone a chance to get here given our power cuts and the traffic light issues outside there. So welcome to everyone who has made it here. As was advised in the market update SENS released today, so on the 30th of January, a voluntary trading update SENS has been released this morning. So our group CEO is actually, Mark Sardi, next to me here is going to go through that. And he'll just give further commentary and background to that. Thanks.

Thanks, Andrew. Good morning, everybody. Maybe before I start, just to give some context because it's slightly unusual to give a trading update in AGM. If you go back a couple of months, post October 14 when we released our results, they were probably the worst results in Ascendis' history. And the period between releasing those results and today, a number of things happened Remedica sale, negotiations terminated, and that gave me a chance to have a strategic rethink. But also you have this dearth of information. So you've got this really poor set of results in October. You roll forward through to January and the picture may or may not have changed, and we'll talk to that now. But I do think what has become clear to us that as we continue on this good business journey, the importance of increased communication with shareholders, particularly as we work our way through a difficult balance sheet with some really good businesses. So I think that's perhaps one. Two, the AGM was also sent out in October. So all of the resolutions that you're voting for went out well in advance of Remedica, and indeed, given some of the frustrations that have been shared with me personally with the shareholders that context, given where we are today, may not be relevant. So you'll see there will be a number of resolutions, which we fully agree that need to be withdrawn, and for very good reasons, given where the company finds itself right now and potential strategic options that we have available to us. I've also been lucky and that I've had my first 100 days. So what wasn't open to me initially was a, what if Remedica was inside the tent. So I've given some thought to that. I've traveled to Remedica and visited with a number of other businesses to get a view on what the landscape looks like there, what the opportunities and some of the challenges are within each of the portfolio of businesses. But more importantly, time to reflect on exactly who Ascendis is, what we are, what the appropriate operating model is and then how we create a culture that maximizes value for shareholders and lenders. So with that lens and its journey to improve a more frequent communication. Maybe just quickly talk about context. Everyone knows it how we got here. So I think if we look back in hindsight, it's always a perfect science. So I'm not here to be disparaging about the past, that is what it is, that's how we, I think, address the future. Ascendis is a collection of complex pharma consumer businesses situated in different geographies, typically owner entrepreneur led that brings it with in its own particular challenges and opportunities, but fundamentally, very little synergies between the group. So I think we spent a lot of time trying to prove the synergy thesis over this global integrated pharma play. I'm not sure it's there. We also put too much debt into the balance sheet. We bought a lot of things, not only with banks' money, but with other people's money. Now when you do that, and I quote these deferred vendor loans, you put, I suppose, a number of unintended consequences into the business. One is if you can't pay them for whatever reason, you end up fighting with the very people that are there to drive the business and determine the ultimate exit value. And two, it creates noise for the existing management teams because there is an old-fashioned principle if you owe somebody, the money you pay them. And so we're working through all of that at the moment. So there are a number of relationship dynamics, complex relationship dynamics that need to be worked through. And then you get to a point where because you've got too much debt, the only strategic option available to you is to sell the crown jewels, which is Remedica. In a world where we have a bit longer to reconfigure what the balance sheet looks like. When I say longer, this is in months, this is not in years. We're not saying Remedica doesn't go during the course of this year. But we're saying there were a number of things that I think we need to look at before we push the sell button on Remedica. And that is the overall operating model within the business. If you have a business which is fundamentally synergy light. And you need the owners and the entrepreneurs to remain involved, then the holding company shared service philosophy, it's no longer relevant. So the longer-term plan is to incentivize or longer than when I say this in the next couple of months, incentivize at the business unit level. We've got 9 different business units, different growth drivers, different trajectories, different market overlays to make sure that those businesses when they are finally put up for sale, and the reason I say finally put up for sale is because absent synergies, you are a listed holding company of various assets. So make those underlying businesses the best versions of themselves and how you do that is to instill that owner or managed-led culture, and you incentivize people to look at all the things that matter. So what typically gets caught up in the mess, is working capital. And when you try to overlay systems that are perhaps inappropriate for these smaller businesses. In the old days, the CEO would know where every bit of stock was in the building. They'd know each customer by name and have full control from input through to exit and sell off at the retailer. We've taken some of that away. I think it's time to put all of that back. So with that in mind, and if you say, that's who you are, how do we get from where we are to a place that stores value for lenders and for shareholders. And with this philosophy of putting business units first, I've looked at 3 pillars, very, very simply, no numbers attached to them. But the first is to stabilize. You've got to fix the balance sheet or at least get some breathing room to decide which assets get sold when because we need to deliver liquidity of the events both to lenders to demonstrate a pedigree to paying down the debt and to shareholders that we can exit these businesses without a what I would call force seller label. For sure, we are distressed. But if you can amend and extend with the lenders, you are no longer forced. So your ability to extract full value in that environment is significantly enhanced. And then during this time to move from the stabilize or fix the balance sheet. I talk about an optimization pillar. So I think what the head office does sorely need is a project management office, not the similar to what a number of the private equity houses have where you go in and look at the business fundamentals, and you put in 3 to 5 things that, from a strategic perspective, make a lot of sense, thick stock, thick supply chain, restore credibility with suppliers, back end some of the API, front end some of your agent that work in different parts of the world. But that time to make these businesses, again the best version of themselves and that is the function of the head office to support and make these underlying businesses now the best they can be. And then move to monetize. So I think once you've done all those things that are necessary for an exit market windows open and close. And it's important to remain flexible to each of those. So that's why I say Remedica is not known for 2, 3, 6 months. We are alive to the fact that it's a very attractive asset. There are 1 or 2 things that I think we need to address before we hit that sell button, part of which is group liquidity. For an example, Remedica was never in this table. So we never counted on that liquidity to determine our working capital with Remedica, now in you have a treasury function now opened to the business, which allows you to take those excess liquidity pools in other parts of the world and deploy them into, let's call it, liquidity like business here in South Africa. So there's an element of self-help that, I suppose, the unintended consequence of Remedica transaction terminating is now brought to bear in the current scenario. And then again, I think the importance of just going back to these owner-led cultures with the capability to bank in the best versions of themselves. So that's the high level on strategy. We are a listed holding company of a number of independent businesses that have grown up in different markets with different owners. And I think it's disingenuous for us to consider a synergy play at the center. So we will look to unwind that. But in an orderly manner that doesn't swing the pendulum too far one way where you destroy the governance and the internal control environment. Moving on to the numbers. So what we've tried to do here is address the concerns, hey, is there an equity store here, is there value in the underlying businesses. So what we wanted to do is just throw some sunlight on revenue, EBITDA. And then just to give you an health warning and what sits below EBITDA. Because we all know that PE multiple is very different to an EBITDA multiple. And you just have to be very careful how you take this data and then bottom-up in your spreadsheets. So on the revenue side. Revenue from these always a gauge of franchise value. The stuff that you're selling your customers wanted. So it tells me whether you're still in the game or whether you're not. EBITDA is slightly different because that goes to the quality of earnings and brings into all sorts of things like exchange rates, distribution, stock, et cetera. So in terms of the franchise value, if you look at the top half of that slide, where we talk to the international businesses, and you've got a South African leg below. What we've done is ranged the revenue 5% at the top to the bottom. So we've got a range. And the reason we do that is because we're not absolutely certain right now as to where the numbers will end up. But it is a tight range, you should generally be a lot closer on revenue than you are on EBITDA. But I think in the interest of getting this information out to the market sooner rather than later, we believe that this is important for you to have something to shoot at. So if we just pause on the international piece. So Remedica, we put that trading update, which had the last 12 months revenue and EBITDA growth at the back end of December. That trend has continued, because obviously, there's not much more data that's emerged. But equally, the periods are slightly different. So that business at the top line remains a star performer. Similarly, with Sun Wave, growing both in the 20s and 30s, depending which part of the range you're on. Very strong performance. The 2 -- now that have had their challenges, it's not with Farmalider. You'll see it a bit later when we get to EBITDA. That's the one that needs a bit of attention, Farmalider. But it is a small part of the business. And you'll see when you strip it out of the EBITDA on the following page, the ex Farmalider business would look a lot stronger. And Scitec. Everyone knows about Scitec, which was the one we took a ZAR 2.2 billion write-down. Now just to put that in the context of ZAR 6.2 billion, ZAR 6.3 billion worth of debt. Had you not done that deal, okay in the hindsight it's all 2020, that business alone, I think, has been a significant contributor to the aggregate over gearing position. So I don't think it's everywhere as over-geared, that particular asset, I think, put a lot of strain on the business. Europe then on an aggregate basis runs at 11% to 17%, depending whether use the rand or euro lens. Now I do think it's important, though, to look at it by company for the reasons that I've explained. Each of these companies is very unique and is very different operating and business models. Looking down to South Africa, where we know the macro hasn't helped. But pharma, our top line remained reasonably steady. Medical, similarly, that's the one where we had challenges in H2, and we'll come to that a bit later on the EBITDA numbers. Biosciences, I would call that noise in the numbers. It is in a departure launch, and it does skew those numbers. So if you back out the Biosciences' numbers, which are disclosed at lower down, we back them out under the discontinued operations, then the revenue for the South African portfolio is in that sort of high 9s, early 10s, 11s. So again, in terms of franchise value, but for 1 or 2 small exceptions, businesses that continue to trade okay in a very difficult environment. So top line at the top, your aggregate 9% to 15% is not an awful down. It's more important to take lower down. So for me, franchise value remains intact. And part of the good business, bad balance sheet narrative. The more important stuff for me is always EBITDA. This is the stuff that pays the bills. So here, what we've done is just made the range a little wider. So it's 10% delta between the lower and the upper end of the range. And if you look at geo, where I spoke of my Farmalider previously, if you back out that ZAR 4.2 million delta in the EBITDA, then the European businesses on average grew between 10% and 15% at the EBITDA line. We'll come to some more granularity of each of the business units. This is just a summary page for you to orient you on this sort of a geographic split of the portfolio. Coming down to South Africa. Pharma, the percentages are distorted given the low base. Medical is back in the game. And I'll give you some reasons why. Consumer Health, I think, has done a phenomenal job, and you'll see that a bit later in a difficult consumer environment, particularly some of the drivers that impact a lot of the retailers were prevalent in that business. Biosciences, again, this is a departure now in assets so back that out when you're looking at it, what I would call, continuing operations. And Animal Health has been a star. And there, you'll see the impact of tender businesses, but in a good way. It's a business where there is tender earnings drop straight to the bottom line with very little incremental costs associated with them, which gives you, I think, we back out on the Biosciences number around between 9% and high-teens EBITDA growth on the remaining South African portfolio. One thing to bear in mind. This EBITDA number doesn't take into account the following things. So a lot of you are going to do a PE valuation, even after-tax number. We can't give that to yet. So don't try to do too much work until we give you the next update, which will be before the March results as soon as we rock-solid on what those numbers will be. There will be another SENS announcement on some of that granularity. But below that, you've got interest costs, it has been a difficult period with the banks, the risk profile has moved up. So you would expect the interest build to move up. There have been some fees as well to extend these interim stability arrangements with the banks, which basically says they don't call on the exposure during that period, and there is an eye-watering number for advisers. I mean a lot of these situations, you have no choice, but to accept the advisory bill and that too puts a strain on the underlying businesses. So revenue EBITDA, good business; below EBITDA, bad balance sheet, right? So that's the lens we're trying to put out there. If I flick on to some of the individual businesses and Remedica, let's just start there. Now this, if there's typically 5 people on the planet who can start and create a business like this. And I would say the Pattichis family are right up there, what Bambis and his father Chris put together is nothing short of remarkable. It's a business that continues to do well year in, year out. And this, despite having a high degree of tender business. Tender business tends to be more volatile, but they have managed surprisingly well to manage the revenue split between private agent and the tender line consistently over time. This business has over just 300 products, that's got a lot of stuff that it sells. And 75% of what it sells it's in antibiotics, ARVs, onco and the cardio portfolios. All big-ticket items in your typical tender lines, but also very strong and fit-for-purpose for the private market. The beauty of having a strong tender underpinning in any pharmaceutical business is it lowers the average cost of production. For your retail business because you're producing these things in high volume. Your profit margins and then what you sell privately are enhanced. The way they get to market is also quite unique. So -- and if you think about a typical pharma company, you're either selling the stuff or you make it or you are researching the cleverness in the middle. What Remedica does is they do the formulation and they manufacture. They use agents for about 40% of their business in other parts of the world. So I think the geographic split is Europe 40, Americas 20 and then some of Africa and the Middle East, another 50. So it's all over the world with agents and sell each of these 4 therapeutic categories. 30% of the business is out-licensing. Now out-licensing is when you take the clever stuff that you've got, if you develop it with somebody else and you sell it into third-party markets. This is a fundamental growth vector for the business. And in order to put, let's call it that front-end product development piece on to this very strong back-end platform, you need to have relationships with things we call CROs. These are research organizations or contract research organizations that understand the way to navigate the patent cliff, understand the formulations, do all the stability trials and make sure that these dossiers when the patent cliff expires are ready for registration very quickly across Europe. There are a couple of relationships that Remedica has that are fundamental to keeping that part of the business moving. And then the balance is through NGOs, so World Health Organization and others. And there's some small private market business in Cyprus itself, which is around 5% or 6%. That is something that will continue to grow, but off a low base because of the introduction of the NHI in Cyprus. The numbers themselves, I think, speak for themselves. When you have a business growing at the top line like it is with EBITDA margins of that order of magnitude, this is an attractive asset. But when you try and benchmark it for evaluation, remember it's formulation and manufacture with agents and CROs and that underpinned this growth at front end. Moving -- sorry, I'm getting late, I'll speed up. Sun Wave Pharma. This is a lovely business in an environment where nutraceuticals and OTC are the game. They are #1 in nutraceuticals, #4 in OTC, capital-light model. They don't produce anything themselves. They don't distribute anything themselves. And it's reliant on the old model of doctors and pharmacists. Great EBITDA margins, great free cash flow conversion. This and Animal Health will be our top 2 free cash flow conversion businesses. Moving on to, if I could read, that one is Farmalider, I think.

Yes.

Farmalider leader is a business where 90% of what they do is with other businesses, so they manufacture themselves

Scitec.

Is it? Okay. Scitec. Apologies, I can't read the screen here. I suppose, one look at the numbers and I could have told you that was Scitec. Okay. Scitec is the one we've had all the trouble. Okay. So it's growth vectors, it needs to contract manufacture for other people. It's got a great back end, but it's caught in a very congested front end market with protein powders and branch chain immunoacids of talk of the day, and it's all about price. Brand is very difficult to secure here. So this is a business that -- its growth story has been below the P&L, below the EBITDA line, and taking our costs, thesis say it is stabilized. But it's certainly one that is not long for the portfolio. And I think that's one you would look to exit in a relatively short order. Farmalider leader is the business I just spoke about earlier. They make stuff, and they are very clever at what they do. They do the 1 -- or the 1 gram paracetamol. They do the ibuprofen intravenous product and sildenafil, and I'm not going to ask the elderly men amongst us what that is, but it is Viagra, liquid Viagra, which you can market imminently throughout the world. Their challenge is 90% of their revenue comes from manufacturing or making stuff and 10% from royalties. Royalties, margins infinitely higher because there's no cost attached to it. So their growth vector is to commercialize more, get into other markets, out-license more of their products to move that 90-10 to a 70-30 in a steady-state environment. But not a massive business. And you can see when you have bumps in the road, how quickly an EBITDA number can erode. Moving on to...

SA Pharma

SA Pharma. So here, we had a resurgence of fortunes in the state pharma business. It is a business of 2 halves, one that sells to dispensing doctors in the states and then the other half, which sells in the private market. In that private market, there are 3 products that matter: Sinuend, Sinucon and Reuterina. They are OTC products. And so very powerful, and they have brands attached to them. And I think coming up to the cold and flu season, we feel quite positive about this business. Medical devices. Now this is a very interesting business. The challenges and the opportunity here, it is license based. So it's the pure reliant on a lot of individuals and the relationship capital they have, it's reliant on buying stuff, insufficient quantity to tick the box that the contract says you have to do. And it relies on you keeping those people in situ for perhaps longer than you would ordinarily. So the opportunity is the revenue is quite sticky. When you're in operating theater, you provide the capital equipment, but then we have our person sitting in that theater to sell all the consumables. The margin is on the consumables. And there is a smaller amount of revenue for the rental of the equipment. So you have to look at this business with a slightly different lens in the CapEx, is actually, or is a relatively short payback, but it is the conduit to the high-margin consumables. And there, we picked up the -- we said Qiagen was actually Qiagen agency. There was some noise in the market originally because we took it over from a distributor. When you're a distributor who loses a license, you flood the market with the stock. So we had to clear that out. We're through that period now. And we think this chance is to move that further north into the rest of the continent. And we lost one agency, it was about ZAR 30-odd million worth of sales. The growth vectors here are, again, picking up more agencies. We are the biggest in the country in this space. And I think there's some short-term optimization opportunities, particularly as how we manage stock and how we classify stock. Consumer. This is a business right smack bang in Corporate SA or SA Inc. 4 businesses, a Skin business, a business that sources through Chempure, a vitamins, minerals and supplements business and the combination of the endo supply chain to -- stuff that make -- a factory that makes things. So on the Skin side, we have a great product called Nimue, high LSM, half the revenues are broad. We have AgeWell product, which will go into the likes of Dis-Chem and will be launched online, a lower sort of current priced equivalent. We have some challenges in the factory. However, we would have to spend at least ZAR 20 million to ZAR 30 million to get it to spec before the MCC audit in April. Chempure is a strategic sourcing business, it was hit by some of the strikes at the port. And VMS or vitamins, minerals and supplements has VitaForce, Bettaway, which are great brands, but they need marketing behind them. So middle LSM business, nice and defensive. But given some of the liquidity challenges this business faced, I think had particularly pleasing result. And in Biosciences, if we look at, that's in the departure launch. We've spoken about this before. This is an agri business that helps grow crops and it has a pesticidal quality to it. We sold the first half of it. The plan is to sell the second half in relatively short order. I think with that, let me hand back to you. We will take questions at the end, that was a bit of a whistle-stop tour, and they're likely to be questions at the back end. Thank you.

Thank you. Thanks, Mark. So yes, we'll do the questions then and we will have an opportunity when the votes are being tallied. So at that stage, we'll also take some queries then we can carry on it and if it's required. Okay. So I'd like to formally welcome you all to the Seventh Annual General Meeting of the Shareholders of Ascendis Health Limited. In terms of the Article 20.5.1 of the company's memorandum of incorporation, I'm chairing the meeting in my capacity as Chairman of the Board of Directors. We have a quorum present, and I'm able to declare this meeting properly constituted. Notice of the meeting has been given in terms of the memorandum. There's no apologies that have been received. Thank you. In terms of the company's MOI, as Chairman, I have determined that all voting and resolutions will be done by way of poll. The way that this will work is that all members attending the meeting had been given the voting sheet for the resolutions to be presented. All the proxy voted -- all the proxy votes have been counted in advance. As Mark indicated, and I wish to advise that the meeting that the following shareholders resolutions that were initially advised in the notice to the AGM have been withdrawn from this AGM. With the significant developments that have taken place in the Ascendis Health business since the date of the notice of the AGM, which was 31 October 2019, being in earlier, the termination of negotiations and the disposal of the Remedica business, the Ascendis Health Board has determined that the following resolutions no longer serve a purpose for the shareholders' to vote on. Firstly, ordinary resolution #6, general authority to issue shares for cash. And the key underlying reasons were with the current relo levels of the Ascendis share trading price, the financial benefit of raising equity funding in this form is quite immaterial and concern of shareholders dilutions also taken into consideration. Secondly, ordinary resolution #7, adoption of the Ascendis Health Employee Share Option Scheme. Key underlying reason is the shareholder support for launching the scheme currently is very low. Special resolution #2, general authority to repurchase shares in the company. Key reason is the Ascendis Group's material level of debt structure simply doesn't justify this resolution. Special resolution #3, approval of financial assistance in terms of Section 44 of the act. Key reason Ascendis current constraints on liquidity does not justify the resolution. And special resolution #4, approval of financial assistance in terms of Section 45 of the act. Key reason the Ascendis current liquidity constraints, not justify consideration of loans to directors. Just for noting the continuing shareholders approval for intercompany loans is essential to the ongoing cash management of the group. This will be dealt with appropriate voting to this resolution at the next AGM. As each resolution is tabled for consideration, you must record your vote on the voting sheet. You may vote in favor of or against a resolution or you may abstain from voting. At the end of the meeting, all the voting sheets will be collected, and the votes on these will be added to those of the proxies. The results will be announced at the end of the meeting after the counting has been completed, being completed using the services of Computershare. And I'll allow the motions to be discussed after they've been put to the meeting. Okay. Notice of the meeting. I move that the notice of the meeting you've taken is read. Are there any objections to that? Okay. Let's move on. Minutes of the previous Annual General meeting. The minutes of the Sixth Annual General Meeting held on November 2018 have been confirmed by the Board of Directors, and you will have received a copy of these minutes as you came into the meeting today. I now move that the minutes be taken as read. Are there any objections? Okay. Presentation of the Audit Committee report. I move that the Audit committee report contained at Pages 11 to 15 of the company's audited annual financial statements for the year ending 30 June 2019 be taken as read. Are there any objections? And are there any questions in relation to the Audit Committee report? Okay. Presentation of the Social Ethics and Transformation Committee report. I move that this report contained at Pages 42 to 44 of the company's integrated annual report of 2019 be taken as read. Are there any objections? And are there any questions in relation to the ACT Committee Report? Okay. Ordinary resolution #1, the adoption of financial statements. The next item on the agenda ordinary resolution #1 is to receive and consider for adoption of the annual financial statements incorporating the directors report and the audit committee report and the independent auditors' report of the company and its subsidiaries for the year ending 30 June 2019. I move that the audited annual financial statements of the group incorporating the directors' report, the Audit Committee report and the independent auditor's report for the year ending 20 -- 30 June 2019 be taken as read? Are there any objections? I propose that the audited annual financial statements of the group incorporating the directors' report, the audit committee report and the independent auditor's report for the year ended 30 June be accepted and adopted. Have I got a seconder?

I second.

Thanks, Bharti. Are there any questions? Okay, we'll now vote on this. So please, can you record your vote on the first line of the voting sheet? [Voting]

Ordinary resolution #2, reappointment of auditors. The next item on the agenda is to approve the reappointment of PricewaterhouseCoopers as auditors of the company for the ensuing year and to note that the individual registered auditor, who will undertake the audit is Tanya Rae. The Audit Committee has recommended that the firm be appointed for the ensuing period. I'd now propose that PWC be appointed as the company's auditor for the ensuing year. Do I have a seconder?

I second.

Thanks, Bharti. Any questions? We'll now vote on this motion. Please record your vote on the second line of the voting sheet. [Voting]

Ordinary resolution 3.1, reelection of Director, Dr. Kinesh Pather. The next item on the agenda is to reelect Kinesh Pather, who is available through the appointment as an Independent Non-Executive Director in accordance with the company's memorandum as a Director of the company and being eligible offers himself for election. I now propose that Kinesh Pather, who is an Independent Non-Executive Director of the company be reelected as a Director. Information in relation to Kinesh may be found at Annexure A to the notice of this AGM. Have I seconder?

I second.

Thanks, Kieron. Any questions? We will now vote on this motion. Please record your vote on the third line of the voting sheet. [Voting]

Ordinary resolution 3.2, reelection of Director, Dr. Yoza Jekwa. The next item on the agenda is to reelect Yoza, who's available for reappointment as an Independent Non-Executive Director in accordance with the company's MOI, as a Director of the company and being eligible offers herself for election. And I propose that Yoza Jekwa, who is an Independent Non-Executive Director of the company be reelected as a Director. Information in relation to Yoza may be found in Annexure A notice to this AGM. Have I got a seconder?

I second.

Thanks, Kieron. Any questions? We will now vote on this motion. Please vote -- record the vote on the fourth line of the voting sheet. [Voting]

I'll now hand over to Bharti, who will propose ordinary resolution 4.1.

Yes. I need a microphone for that.

Yes. And then -- think we're going to need a mic. I think there's a portable one actually around in here.

Ordinary resolution #4.1, election of Director, Andrew Brian Marshall. The next item on the agenda is to elect Andrew Marshall, who is available for appointment as an Independent Non-Executive Director in accordance with Article 26.2 of the company's MOI as a Director of the company and being eligible, offers himself for election. I now propose that Andrew Marshall be elected as an Independent Non-Executive Director. Information in relation to Andrew may be found in Annexure A to the notice of this AGM. Do I have a seconder?

I second.

Thanks, Kieron. Are there any questions? We will now vote on this motion. Please record your vote in the fifth line on the voting sheet. [Voting]

I will now hand the meeting back to Andrew Marshall.

Thanks, Bharti. Okay, ordinary resolution 4.2, election of Director, Mark Sardi. The next item on the agenda is to elect Mark Sardi, who is available for appointment as an Executive Director in accordance with Article 26.2 of the company's MOI to fill a single vacancy as a Director of the company and being eligible offers himself for election. I now propose that Mark Sardi be elected as a Non-Executive Director -- Executive Director, yes, sorry, that's incorrect as elected as an Executive Director. Information in relation to Mark may be found in Annexure A to the notice to this AGM. Have I seconder?

I second.

Thanks, Bharti. Are there any questions? We will now vote on this motion. Please record your vote on the sixth line of the voting sheet. [Voting]

Ordinary resolutions 5.1, 5.2, 5.3, 5.4, election of members of the Audit Committee. Please note that these are 4 separate resolutions to be processed and have to be voted on separately. In terms of the company's Act 71 of 2008 as amended, at each AGM an Audit Committee comprising at least 3 members, who are all Independent Non-Executive Directors must be elected. It is proposed that Bharti Harie, Mary Bomela, Kinesh Pather and Yoza Jekwa be appointed members of the Audit Committee and be elected for the next year. The election of each member of the Audit Committee will be voted on as 1 vote on each line of your voting sheet. Information in relation to the members may be found in Annexure A to the notice of this AGM as well as on the Ascendis website. I now propose that Bharti Harie, Mary Bomela, Kinesh Pather and Yoza Jekwa be elected as the members of the Audit Committee. Have I seconder?

I second.

Thanks, Kieron. Are there any questions? We will now vote on this motion. Please record your votes in the appropriate lines on the voting sheet. [Voting]

Okay. So ordinary resolution #6, general authority to issue shares for cash has been withdrawn. #7, adoption of the Ascendis Health employee share option scheme has been withdrawn. So we move on to special resolution #1, approval of Non-Executive Directors' remuneration in terms of Section 66(8) of the company's Act. The company may pay remuneration to its Directors for their services as Directors. Section 66(9) requires the remuneration to be paid in accordance with special resolution approved by shareholders within the previous 2 years. The effect of the special resolution is that Directors will be entitled to the fees to be paid for the year ending 30 June 2020. The proposed fees are set out on Page 40 of the IR 2019. I move that the special resolution be taken as read. Are there any objections? I propose that the special resolution #1 as set out in the notice convening this meeting be approved and adopted. Have I seconder?

I second.

Thanks, Kieron. Are there any questions? We'll now vote on this motion. Please record your vote in the appropriate line on the voting sheet. [Voting]

Okay. Special resolution #2, general authority repurchase shares has been withdrawn. Special resolution #3, approval to provide financial assistance in terms of Section 44 of the Act, that's been withdrawn. Special resolution #4, approval to provide financial assistance in terms of Section 45 of the Act has been withdrawn. We now move on to ordinary resolution #8, which is endorsement of the Ascendis Remuneration Policy resolved by way of a nonbinding vote of the company's remuneration policy, including the remuneration of the Independent non-Executive Directors for their services as Directors' is endorsed. This policy is available in the Governance Section on the company's website. And then moving on to ordinary resolution #9, endorsement of the Ascendis remuneration implementation report resolved by way of a nonbinding vote of the company's remuneration policy, excluding the remuneration of the Independent non-Executive Directors for their services as Directors' is endorsed. This policy is available in the Governance Section on the company's website. The Board commits that if either of the remuneration policy or the remuneration implementation report are voted against by 25% or more of the votes exercised that in this instance, it must provide for the following in the SENS announcement of voting results. Firstly, an invitation to dissenting shareholders to engage with the company; and secondly, the manner and timing of such engagement. Okay. Ordinary resolution #20, general authority to sign all documents resolved that any Director or secretary of the company or any other person to whom a Director has delegated authority be and is authorized to sign all documents and take steps as may be necessary to implement the resolutions contained herein. I move that the ordinary resolution of #10 be taken as read. Are there any objections? I propose that the ordinary resolution 10 as set out in the notice convening this meeting be approved and adopted. Have I seconder?

I second.

Thanks, Kieron. Are there any questions? We will now vote on this motion. Please record your vote in the appropriate line on the voting sheet. [Voting]

Okay. So why are we waiting for the -- we've now completed all the resolutions. We'll now vote on those, if you wouldn't mind giving any forms you have to the guys from Computershare. And then what we'll do is have some coffee, tea, muffins, whatever. And we'll also open to questions, if you are happy with that. So should we start with some questions and let's just get those going? Anyone who wants to pop-out and get a cup of coffee or tea, welcome to do so.