Ascendis Health Limited (ASC) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the June 30, 2020 Ascendis Annual Results. First of all, not great to start off with an apology, but we've had a delay in getting to you this morning primarily because of a technical sign off that's required on certain disclosure notes in the AFS. Now for those of you who read our SENS announcement, anything below EBITDA, I think you need a degree in hieroglyphics or sort some other foreign language to understand what was going on. The purpose of today is to bring some color to all of that and to do the reconciliation between F '19, F '20 and to underscore some themes that we think are important across the board. The format will remain pretty much the same. I'll give an overview of the 11.5 months that I've been with the business now. Kieron will go into the detail in the financials, and then I will do an operating review by business unit. I do think, as we said in the -- at the AGM in Feb and at the interims, understanding the individual business units gives you the ability to do a sum of the parts to see where the value lies in the Ascendis portfolio. So if I move on to my overview. I think it's safe to say that the word challenging springs to mind when we describe the last 12 months at Ascendis. Too much debt is an issue, but what's much worse is too little liquidity. Liquidity or solvency is the thing that is fuel for growth and allows you to pay your debts on time, it allows you to invest where appropriate, and it allows you to keep your relationship with customers and suppliers intact. So when you have too little liquidity, it limits operating flexibility and in sort of plain English, it's like driving a sports car with the handbrake on. So part of our journey was to relieve some of that pressure that was applied by the handbrake. The good news is that we also got to spend a lot of time understanding the group's strategic capabilities and the underlying business strengths. And I would say, in large part, the vast majority of the assets sitting in the Ascendis portfolio are good assets. There are a couple that we earmarked for sale. We'll speak to those a bit later, and we'll give you the reasons why we've looked to dispose of those. But it does -- it gives a consistent message of good businesses, bad balance sheet. I think it's safe to say that there's still a lot to do, but the beauty is we now got a road map of where we want to take the business. And important on delivering our purpose, a purpose statement is fundamental to any business. It tells you what you're supposed to do. And importantly, gives you a framework of what you shouldn't be doing. And making tomorrow healthier is not just the life-saving drugs and therapies that we produce and distribute, but it's creating an environment for our employees to thrive. For our lenders to trust in the story and to start restoring some belief, certainly on the equity side, that there is a healthy business beyond today. A quick recap on the strategy. We set ourselves a 3-pillar strategy. The first was stabilize. We just fixed the balance sheet in there. I'm pleased to say that early June, we concluded just under ZAR 7 billion debt refinancing in a very difficult environment. I think you all cast your minds back to March when COVID hit, liquidity became increasingly scarce. So if it was tight before, it got even tighter when COVID hit. I just also want to draw attention to the fact that we raised new money. So that new money was instrumental in relieving some pressure on that handbrake. But deeply grateful to our lenders, putting in ZAR 100 million ahead of concluding that refi. It's a big leap of faith. And it was fundamental to us playing a meaningful role in combating COVID-19 in this country. It also gave us a chance to connect with all our stakeholders, suppliers, customers, employees, being transparent about what we're good at, transparent about what's not so great, and having a plan to restore. And belief with our employees. We've found engagement across the business over the last 12 months has moved up as people get energized and understand the fundamentals behind the Ascendis story. We're now like that we can pivot into this optimize, or what I call, execute better phase. The fundamental truth is we have some great entrepreneurial DNA across this business, and the challenge is now to leverage that. It's tricky because entrepreneurs do things in a difficult way. This freedom within boundaries is a concept that certainly all the entrepreneurs have embraced. But it is important, and I'll come to it a bit later when you're looking to harness energy and innovation and resilience across the business. We've also established a transition team. That -- what that team does is help you execute on the strategic priorities. Each business unit has its own set of strategic priorities, and I'll come to those when I do the business unit review, but to have a team that has a regular drumbeat or cadence at the BU level to assist with things that are business unusual and things that can either move the EBITDA line or reduce the investment in working capital or CapEx of things that we singularly focused on. And then the last piece, the monetize and grow, the only way that you can typically get out of a situation where you've got too much debt is you can either tear up the existing facilities agreement and replace it with permanent capital or you have to sell your way out of it. So we have concluded a number of agreements to sell some of the smaller businesses. These are businesses that were either in structurally challenged markets or consume too much capital or were a management distraction to that singular purpose of making tomorrow healthier. But we have set an orderly disposal program to go and drive that balance sheet restoration. We've appointed advisers in all the key assets. So we're well on our way in that journey to a, sort of a better future for the balance sheet. Just the last piece that I wanted to mention is just this bit around resilience, innovation and energy. These are behaviors that fundamentally underpin a culture, and I'm pleased to say, in this environment that we inherited through COVID and an environment where we were driving with this handbrake on, they were fundamental to moving this business forward and have certainly underpinned the early stages of our turnaround journey. And again, I'm deeply grateful to our people for coming to the party, for boxing clever in a different environment to deliver certainly a good result at the EBITDA line. I'll hand over to Kieron now to take us through the financials.

Thank you, Mark. Good morning, ladies and gentlemen. The group delivered an improved performance for the year, with strong growth in revenue, EBITDA and operating profit. And a reduction in the headline loss for the year. However, high debt levels and the weak trading environment have continued to weigh on performance. Before I get into the detail, I would just like to thank the team. Like so many other companies, our financial year-end reporting process was particularly difficult, working under the constraints of the COVID-19 lockdown. Thank you to my group finance team as well as all the finance teams in our subsidiary companies in South Africa and in Europe for all their hard work and dedication over the last 3 months. Looking at the revenue growth, as we can see, we're growing the top -- the continuing operations revenue grew by 19%. Just to remind you what we've included in the discontinued operations, Scitec, which was flipped -- which was sold back in July 2020 as well as the Bioscience business and our Direct Selling business. This year, we've flipped Remedica back into continuing operations as that's -- the negotiations for that sale fell through in December 2019, and we're busy preparing that business for sale now. Looking at the European business. We see 28% growth in Europe, driven by weakening rand, which accounted for about 9% of that growth. So the rest of that 19% was driven by organic growth, mainly in Remedica, who had secured additional tender business in Mexico as well as the introduction of the national health service in Cyprus, which Remedica benefited from. We also saw strong growth in Sun Wave Pharma because of product launches in 2019 and early in -- in early in 2020. From a constant currency comparable basis, Remedica grew at 30% and Sun Wave Pharma grew at 16%. We now see that the EU accounts for about 53% of the revenue, which is up from 49% from last year. In South Africa, we also saw a pleasing organic growth in revenue. And this is mainly due to the recovery from prior year supply issues, some new agency business that we acquired in our Medical Devices segment and new tender awards in our Animal Health business. Looking at our different segments. We've got 4 segments classified under our continuing operations. The Bioscience business is now classified as discontinued with the sale of Efekto, Afrikelp and Marltons, which we sold in July 2019. Looking at the revenue, we saw strong revenue growth in Pharma, driven by Remedica. This is partly negated by the South African Pharma business, which had a tough year, driven by COVID-related supply issues. The Medical Devices growth was boosted by a new Qiagen agency. COVID had a mixed impact on this segment with some nice large sales coming through for equipment and COVID testing kits, which made up for the loss in consumable sales related to elective surgeries and a lower level of motor vehicle accidents, which are addressed by orthopedics. Looking at our EBITDA, we saw positive EBITDA performance in all the segments. In consumer, a lower level of write-offs in the supply chain business versus last year helped boost that EBITDA performance. And in Sun Wave Pharma, strong growth from those new product launches and a part reduction in marketing savings in Q4 due to lockdown regulations. In our Pharma business, the bulk of that growth is driven by Remedica with desired appreciation and the incremental Mexico tender. In Medical, we saw a recovery from the FY '19 liquidity strain, the addition of the new diagnostic agency business which generated hard currency in Africa and a lower level of travel costs in H2. And in Animal, we saw improved GP margins because of price increase timing and some excellent cost control in that business. I can refer you to the income statement. I won't go through every line, I just wanted to highlight a couple of those lines. The first one being our gross profit and our gross margin performance. We see an increase to 46.1% due to 3 drivers. Firstly, we saw our high-margin EU businesses growing very fast, and that was further boosted by an 8% weakening in the rand over the year. Just to remind you, our South African businesses are fully hedged, which has helped to soften the blow of the negative currency impact in Q4 FY '20. We also saw an improved product mix in our Animal Health business. And as I mentioned previously, a low level of inventory write-offs in our Consumer business. Looking at our normalized expense growth. We see we grew by 9%. Just to remind you, we normalize for any of the costs associated with any debt restructuring and for any disposals that we incurred during the year. So the remaining OpEx growth was driven by an investment in marketing by 22% growth on last year, investment in sales heads and improved distribution. And those are one of the big drivers around our excellent organic revenue growth. We did see an increase in our bad debt provisions with our IFRS 9 models, increasing it because of the future deteriorating economic environment. And we also saw a level of increased provision for legal matters that we're experiencing in our Pharma leader and our SA Pharma business. We've chosen to reflect the EBITDA growth versus last year without the uplift that we got from the adoption of IFRS 16, which is the new lease's IFRS statement. That boosted our EBITDA by ZAR 58 million for the year, which reflected 58% growth on last year. If we take out that 58% upside, we are still growing our EBITDA by 50%. And this has seen an improvement in our EBITDA margin to 16.1% on a like-for-like basis. Looking at the bottom half of the income statement, the picture is, unfortunately, not as rosy. We did see quite a massive increase in finance costs, driven by increased debt levels in the EU. We drew down on some of the new facilities to assist to pay the Sun Wave Pharma deferred vendor liability that was owing. There's also increased amendment fees, increases because of stability margins and higher debt costs overall as well as a recognition of previously capitalized finance costs in the income statement. Going from earnings to headline earnings, as we do in the past, we adjust for any capital items. So we've removed the impact of the impairments, which I'll go to -- go into further detail in a future slide as well as the profit and loss on some of the disposals that we had during the year. Just a note on our weighted average number of shares, we saw a decrease of 7 million shares due to some treasury share accounting adjustment related to an LTI hedge that we've put in place since July 2018. So overall, we've seen an improvement in the NHEPS and a normalized NHEPS from a loss of ZAR 0.176 to a loss of ZAR 0.06 for FY '20. As Mark mentioned, the preparation of these accounts was fairly complicated with some of the businesses coming in and some of them going out of our discontinued operations. So if I can just explain and show on this slide what the impact of those various movements were. As I mentioned earlier, Remedica, the negotiations for that sale fell through in December 2019, and we are currently preparing that company for new sale. It was not ready to be sold at year-end, so we had classified it as a continuing operation. We announced the sale of Scitec in July 2020. This is after selling our South African Sports Nutrition businesses back in September 2018. So now Scitec is accounted for as a discontinued operation. And we've also completed the sale of our Direct Selling businesses back in 31st of July 2020. We also announced the sale of our SA Pharma state business last week with our trading update. This is accounted for as an asset held for sale, but as it is not big enough in terms of the -- in the total segment, it doesn't qualify to be accounted for as a discontinued operation in the income statement. If it had qualified, we would have seen group normalized continuing EBITDA margin increase from 17% to 18.5%. And then we continue to carry the Bioscience -- the remaining Bioscience businesses as discontinued operations. Just to remind you, we sold the first part of those businesses back in July 2019 and the remaining businesses are held for sale now. So as you can see, the businesses that we've sold have been fairly margin-dilutive, and that's resulted in the total group normalized EBITDA margin improving from 14.5% to 17%. As I mentioned earlier, we did recognize some impairments for the year, much lower than we had last year at ZAR 4.5-odd billion last year. The impairments this year were driven by 3 main factors. First was the sale of Scitec. We sold Scitec way below its net asset value, so the remaining value on the -- that we were carrying will be fully impaired now. We've also seen a sharp increase in the weighted average cost of capital rates due to a forward-looking -- a weaker forward-looking economic environment. And then in our Medical business, we had increased CapEx investment. Part of that was a catch-up from last year where we didn't invest enough in CapEx, and some of that was investment going forward and the impact of the lower EBITDA performance in the elective surgery channel. So overall, for continuing operations, we've recognized an impairment of ZAR 654 million. The other big cost that we incurred for the year are the transaction and restructuring-related costs. As announced in September 2018, because of the large cash commitments we had in FY '20, we needed to review and optimize our capital structure. The high-yield bond project in November 2018 did not progress due to launch -- due to adverse market conditions. And in post, the Remedica negotiations falling through in December 2019, the lenders and ourselves have appointed corporate finance advisers and legal advisers to assist implementing a debt restructure. We've been engaging with our lenders since March 2019 and have had their full support in the form of interim stability agreements, which have provided an absolute waiver of all debt covenants. I'm pleased to say, on the fifth of June 2020, we announced that a new senior finance agreement had been agreed with our lender consortium, and I'd like to thank them for all of their support over the last 18 months. Post year-end, we've embarked on a new Remedica sale process, as Mark mentioned on his first slide. Looking at the other big cost base that's increased. Finance costs, as you can see, there's quite a few reasons driving the big increase versus last year. The bigger drivers are a 1% increase in the -- related to the interim stability agreements for the senior debt providers, recognition of prior refinance costs being amortized for the original debt that was raised. An increase in finance costs from the debt restructure in the form of cash cost and PIK and in penalty interests on overdue deferred vendor liabilities for Remedica, Sun Wave Pharma and the Kyron business. Our total average weighted cost of debt has increased, which recognizes the change in the risk profile since the original debt raise back in 2016. Going on to our balance sheet. As a highly leveraged business, cash generation is very important to us. We saw the cash conversion from operating activities come out at 63.8%. If we exclude the impact of the once-off costs related to the debt restructure and the disposals, that conversion percentage would improve to 85%. As I mentioned on my previous slide, we've also seen the increased cash cost or finance cost driven by our high debt levels and incremental interim stability margins. We did see quite a high degree of CapEx investment into compliance in the EU and our South African businesses as well as expansion CapEx for intangible assets in our European businesses and demo equipment for our Medical Devices business. Proceeds from the sale of our Bio1 business in July 2019 were used to repay a bridge loan of ZAR 360 million back in July 2019. Looking at our working capital, our net working capital grew in line with the group's revenue at about 38% of revenue, which is below our target of 40%. A couple of the drivers behind the increase in our working cap, will go into the 3 different buckets, first one being inventory. We saw that investment in a new Medical Device agency -- 2 Medical Device agencies, being Qiagen and Phillips. And then a stock build for our Animal Health business to mitigate the move of the manufacturing facilities from Cipla to another third party. Our debtors at year-end increased, primarily driven by the increased tender business that we had in Mexico for Remedica as well as the increased government business that we sought to combat COVID-19. And then in terms of creditors, and I'd say we had experienced liquidity issues as a result of having to -- and as a result, we had to negotiate longer payment terms with some of our suppliers. Post the restoration of our liquidity, all of our trade creditors have been caught up. Then the other big factor on our balance sheet is obviously our gearing. Our net debt-to-EBITDA ratio has decreased to 5.2x at year-end with a covenant of 5.9x. Some of our long-term debt has been reclassified to short term for businesses that we've classified as held for sale. We see that 74% of our debt now -- our bank debt now is in euros, which increased via some new facilities that we've raised there as well as the 20% depreciation in rand year-on-year. 83% of our deferred vendor liabilities are also designated in euros. The new senior facility agreement signed in June 2020 with the lender consortium has a bullet payment, capital repayment in December 2021. As Mark mentioned, we also managed to raise a new super senior facility of about ZAR 464 million to address deferred vendor liability payments, COVID-19 and any working capital growth that is required. The divestment program that we've launched will be used to repay senior debts and our DVLs within the next 12 months. Before I hand over to Mark, in closing, I'd just like to thank the many amazing people I've met during my 5 years at Ascendis Health, including colleagues, former colleagues, professional advisers, auditors, lenders and shareholders, locally and internationally. Hopefully, our paths will cross again soon.

Thanks, Kieron. All right, ladies and gentlemen, I'm not planning to repeat everything that Kieron said. I'll maybe just make a couple of observations on the numbers as to what's important to me. One, the impairments. Just remember that the statement doesn't allow you to write up. So if you're baffled by EBITDA going up by 50% and an impairment charge in the quarter of ZAR 700 million, the reason for that is you only write-down those that don't meet the ability to at least stay at the original cost or carrying value. If you were to revalue across the board, if you were to revalue Remedica or Sun Wave, I suspect the net impact would be positive, but the accounting regime doesn't allow one to do that. So just a, I suppose, a sense check on the integrity of the portfolio, and whether in your minds there's a disconnect between impairments and the upward momentum that we've seen in EBITDA. The second thing to say is free cash flow conversion is sacrosanct in our business. I'm pleased to see it's below our 40% of revenue. But it's an increasing discipline across the board. When you've been with our capital for some time, you learn to appreciate its value. And the whole theme of return on invested capital then deploying money to the right parts of the business is, I think, is a theme that will continue to grow as we move through the turnaround phases. On the P&L, I'll go to the individual business separately, but maybe just some high-level comments. As Kieron mentioned, the euro portfolio, with those denominated in euros was up 20%. If you bake in the impact of currency, it goes up 29%. We did that just to show you the sort of defensiveness of the portfolio: one, in terms of revenue; but two, the rand hedge qualities that it brings to bear. You'll see a disproportionately large impact on EBITDA because the higher-margin businesses are growing faster in Europe. But the South African businesses, as Kieron mentioned, were completely hedged. So we managed to mitigate some of the noise there. The only business that may stand out in terms of top line attrition is Consumer Health. But you will see when we go to the next slide, the quality of earnings has improved dramatically because of an increased management focus and bedding down 4 businesses that had previously sat separately. So I think across the board, quality of earnings up, better stock management, and we're in sort of the early phases of this improved liquidity environment, but not out of the woods yet as it relates to total indebtedness. EBITDA, on aggregate, you can see the difference when I look at the European portfolio, 27% up but 47% up when you convert into rands. We'll go through the various business units, but even the EBITDA split is sufficiently large in euros to accommodate the debt split, that 75, 25 debt split that Kieron spoke about. The EBITDA matches that portfolio. Consumer Health, the big jump is better stock management, with just under ZAR 30 million stock write-off in the prior period. I'll explain why and what we've done to fix that. Animal Health and the other businesses we'll get through individually. But I think if you go right to the bottom and look at the EBITDA margins of around 12.8%, moving up to 16%, for me, that's a fundamental improvement in the quality of earnings across the business. That's largely because we are now only looking at the businesses that weren't a drag on that EBITDA margin. So the Dezzos of this world, the Direct Sellings, Biosciences 1 and others that we've disclosed to the market, were typically EBITDA-dilutive, and getting them out of the portfolio has also made an impact on the EBITDA line. This is the part that should really interest you because this goes to the integrity of the underlying portfolio. We've mentioned which assets are up for sale, so I think you can make up your minds as to the ability we'll have to exit given the tailwinds that we've got in both of the weak knees of these businesses. But Remedica, as everyone knows, is our mainstay. This business develops, manufactures and distributes high-quality generics across the world. We're in over 130 markets. We're in 6 continents. We do over 300 products. We play very strongly into, what I call, COVID-defensive spaces. So in the ARV space, we have, I think, around 25% of our portfolio dedicated to that channel. Onco, just under 15%. These are high-quality drugs which play into the chronic medication phase. So if you have a co-morbidity in a COVID environment, it is fundamental that adherence is adhered to. So in other words, you keep taking your drugs, which is why the COVID defensiveness, I think, has been brought to bear. One, because of the quality of the portfolio; but two, because it plays well into that adherence theme. If you try and back out what was specifically COVID-related, we sold some chloroquine, around EUR 3 million, EUR 3.5 million to EUR 4 million worth of chloroquine. I think there's only one country in the world that still takes it, I think somewhere in South America where the President extols its virtues, so that is a once-off. We have some offsetting numbers, around EUR 2 million, EUR 2.5 million, which came from API shortages and increasing costs in getting stuff from the API producers through to Remedica. But in large part, that ZAR 41 million is a real result, which I think would have stood muster even outside of COVID. So great business, a great management team. We've got a full first year of Michalis and his team at the helm. And again, one of these businesses that there's probably 5 families in the planet who could have put this together, and we're deeply grateful to the Pattihis family for this and the succession policy they put in place. We got a really strong management team who know what they're doing, and I'm very confident about the future in that business. Farmalider similarly plays in a slightly different place, niche pharmaceuticals. So very strong in paracetamols and pains, ibuprofen, some niche products like sildenafil. A very clever set of people who know how to develop high-quality drugs. I think the next phase of its evolution will be looking to externalize the revenue stream through its licensing strategy. Just to remind everybody, we owe 49% of that business, where the rest we all own 100%. Pharma SA, well, it's a business of 2 halves. So you'll realize, we made an announcement on a business called Dezzo. That is our state tender business and our dispensing doctor business. We tended particularly poorly 2 or 3 years ago. That business made money every other year but consumed a phenomenal amount of working capital. We weren't the best owner of that business. And we believe moving it over to Austell will ensure the longevity of that business and the people that go across. And put it in hands that understand that space better than we do. We'll then be left with a strictly private business, which will consist of the Sinuend, Sinucon and Reuterina products. But we're also looking to expand that business into other key niche areas. So instead of the -- what they call the Me Too generics going into niche categories in GIT, diabetes, cold and flu, pain and some of the immunosuppressants. So the biosimilars and some of the very clever niche drugs. That is the next phase of Pharma's evolution. It is probably a 2- to 3-year evolution. It won't be a 1-year turnaround because everyone knows it's important to build a pipeline and have a route to market and a launch readiness plan that backs that up. Clicking on to Medical. So Medical, interesting business. We really have to go under the hood there to see what happened in COVID and how we boxed clever. So the 1/2 of Medical did particularly well, a business called RCA, where we supply ventilators and nasal high-flow devices. Obviously prolific in a COVID environment. We found the utilization of consumables against those sort of front-end sort of products has moved up dramatically as one would expect with the treatment of COVID. And we'll have to pivot that business model from selling things, the high nasal flow devices and the ventilators to maintaining them. Fortunately, the alliance we have with our distribution partners is such that there is a technical walled garden around these products. And so the maintenance over the next 2, 3 years is largely hard wired, but a shift from selling things to maintaining things. The businesses that were really hard hit were those that were reliant on elective surgeries or trauma. Yes, so electives, we believe, over time, will come back in. And trauma, equally, with the release of lockdown regulations, we're likely to see more trauma cases. The issue in some of the businesses will be with hospitals being capital constrained. We may have to move our business model from selling things in and getting money upfront, to ones that require a longer-term sort of financing relationship where we become lessors. But I'm also pleased to say that upfront, that behavior of innovation that I draw -- I drew attention to, it was really interesting to see how we boxed clever here, either through testing or through getting involved in South African-based PPE development and procurement. It was really good to see how the business hustled to make what was a difficult sort of set of businesses perform well in a very trying environment. Sun Wave Pharma, this is our Romanian business. Phenomenal entrepreneur who set up this business from 8 to 10 years ago, it's now #1 in nutraceuticals in its market. Top 5 in OTC. These are branded nutraceutical and OTC products. You can see it in the EBITDA margins. This is primarily a sales and marketing organization. So whereas for Remedica and Farmalider would be production development-heavy, Sun Wave is marketing and distribution-heavy, but a really good business in its own market and really knows how to develop solutions to both pharmacists and doctors in that jurisdiction. Consumer Health. This was a year of integration. We put, what we call wellness, the vitamins, minerals and supplements business, the skin business, supply chain, which is the factory and Chempure, the strategic sourcing business, together. And each of those had varying degrees of COVID impact. So wellness did particularly well because the whole VMS or vitamins, mineral, supplements category, would have done well as people moved to protect their immunities. Skin battled because it is typically -- and particularly a product like Nimue is dispensed in the salons, a high-touch environment with those sort of routes-to-market being closed. That business, certainly in South Africa, battled. We're starting to see a resurgence certainly in other parts of the world as we distribute into the U.K. and other markets. Supply chain or the factory is probably where we have the biggest operational turnaround. In the past, we would manufacture against their cost recovery. So you make as much as you can to recover your costs. You forget that you need demand on the other side. And so with increased discipline on manufacturing for demand-led production has mitigated that ZAR 29 million stock write-off that we made in the prior period and much tighter management in that part of the business. The strategic priorities there remain SKU rationalization. All Pharma businesses or Consumer businesses are being involved in -- are typically wedded to their portfolio. But SKU rationalization not only liberates management bandwidth, but capital as well. So that's part of the forward journey. We're looking at expanding the skin business model internationally. We think Nimue, in particular, has got some good legs. And then developing this omnichannel strategy across the business, I think, will be the next part of the evolution. Two more businesses to go through. Animal Health, Kieron spoke about that business. A vertically integrated Animal Health business. So you've got the small animal, the stuff that you go -- that you care for, you go to the vet. You've got the large animal, the stuff you typically eat. And then we have Kyron, which manufactures products into both of those spaces. It is a business that has consistently grown year-on-year, particularly margin, phenomenally well controlled and managed from a cost perspective and currently enjoys a #3 market share now for a home-grown business in a market that's dominated by multinationals. That is a phenomenal achievement. And the owners and managers that we have in that business were those that started though some 15, 20 years ago. Biosciences, I won't mention too much. That is disclosed as a discontinued operation, and we are in the process of disposing of that business. Ladies and gentlemen, that's all from me. Just to also just extend my thanks to Kieron. I've been at the business or at the helm for just under a year. It's been an absolute pleasure working with Kieron. It's been, I would imagine, quite a roller coaster ride, having been at Ascendis. But the dedication, the hard hours and the sort of the [ personability ] that you bring to this business is greatly appreciated and certainly enjoyed working with you, so. Thanks very much.

Thank you, Mark.

Okay. [indiscernible]. All right, first one. What is the outlook for the sale of Remedica? How far are you in the process? What are your expectations in terms of valuation and terms? Okay. So some of those, obviously can't comment on. We have appointed advisers to sell Remedica. I think that's common cause. Certainly it was quoted in a Bloomberg article saying that we'd appointed Jefferies some months back. Equally, we ran a process, a beauty parade, in which Jefferies was the winner. So I suspect there are buy-side advisers looking to drum up interest for the asset. We're at the early stages. We've just completed the financial year-end. We've also gone through a significant and detailed due diligence process this time around. So a lot of work on the dossiers to confirm that the portfolio that we have and what we've earmarked in terms of upgrade compares favorably with other generic manufacturers in the sector, to confirm that the growth areas that we've identified are sensible and that if there are regulatory changes in those markets, the dossiers will pass muster. So I think a big tick on the dossiers. We've also done a whole lot of commercial due diligence, taking it a couple of notches lower. We've built a 4,000-line financial model, which is built up biomolecule. So I mentioned we have 300 products, there's about 160 molecules, which go into different SKUs. So the rigor and the, I think, the data integrity that -- with which we're approaching this process is sound. And then we will do both a financial review and what we call a current year review by the end of September to see how we're tracking against budget. It's always important in a sale process to know whether you've got wind in your sales or whether you're heading into a headwind. And fortunately, in all of those scores, the fundamental equity story remains intact. And we'll have more for you on that as we progress through, but early stages in terms of reaching out to potential buyers. And as we have more to report, we certainly will.

And Mark, related to that, we have a question saying that Remedica is the crown jewel of Ascendis. What happens next after it is sold? The sale of Remedica will leave a huge gap. How are you looking to fill that?

Yes. So it's very difficult to fill Remedica. Remedica is an outstanding business, and I agree with you, it is the crown jewel. It is, unfortunately, the only one that significantly reduces gearing. And if we just look at its contribution to EBITDA, if you look at the EBITDA margin profile in the early 30s, it's an astonishingly well-run asset. We had very few or limited degrees of freedom here. The remaining portfolio post Remedica, and remember, you don't have to -- if you want to build a sub-Saharan African Pharma play, you don't have to own assets in order to secure a pipeline. So to the extent we can get some of the niche onco products, some of the ARV portfolio that we can sell into the rest of Africa, that is something that we'll look to legislate for outside of the sale process. So it will assist in building that Pharma pipeline. But this is the key delevering action in our portfolio. And with both the lenders and shareholders, we've given a commitment to follow that path to the balance sheet restoration.

We have another question here. Do you think Remedica can continue to grow revenue by 20% to 30% and EBITDA growth in euros for 2021?