Adcock Ingram

With its beginnings as a small Krugersdorp pharmacy founded more than 130 years ago, Adcock Ingram now ranks as the second-largest local manufacturer in the private pharmaceutical market and is the second-largest supplier to the public sector, having branched out into new product development, manufacturing, distribution and sales and marketing along the way.

Noteworthy is the major share the company commands of the critical care market as the largest supplier of critical care products to the public sector and hospitals. “Throughout our rich history we have continually evolved to keep up with the expectations and needs of all our stakeholders,” the company relates. “Our mission is to provide quality products that improve the health and lives of people in the markets we serve.”

DIVIDE AND CONQUER

“Adcock Ingram provides an extensive portfolio of branded and generic medicines. It also has a strong presence in over-the-counter brands, and is South Africa’s largest supplier of hospital and critical care products.”

Adcock Ingram’s Consumer division competes mainly in the unregulated Fast Moving Consumer goods (FMCG) market, with products also distributed and marketed in modern and traditional trade outlets. “We continue to focus on the marketing, selling and distribution of healthcare, personal care and homecare brands,” the company expands, with Adcock Ingram’s strategy to pursue value-adding acquisitions exemplified by the 2020 acquisition of Plush, the fourth-largest player in the market with a proud heritage of over 55 years.

“The Over the Counter (AI OTC) division manufactures, markets and sells medication with a focus on brands sold predominantly in retail pharmacy, where the pharmacist plays a role in the product choice,” Adcock Ingram offers of this further key arm which takes on highly competitive markets such as self-care pain management, allergy and energy.

Arguably most exhaustive in scope is Adcock Ingram’s Prescription division, which has worked tirelessly to build and offer a wealth of medicines in targeted therapeutic areas for patients consulting healthcare professionals. “Mental health has been thrust into the spotlight due to COVID-19,” the company says of its Central Nervous System (CNS) provision, one of nine areas of expertise. “We remain a partner of choice for multinational companies with CNS brands, offering treatments for a wide range of psychiatric and neurological disorders.”

A leading manufacturer and supplier of hospital and critical care products in Southern Africa, Adcock Ingram Critical Care (AICC) offers products through multiple portfolios and across wide ranging customer channels, the company outlines. “Beyond its world-class commercial capability,” it says, “AICC manufactures an extensive range of products in its unique dual process factory which comprises a comprehensive plastic extrusion plant together with a fully accredited pharmaceuticals manufacturing facility.”

RESILIENT PORTFOLIO

Quality innovation and technology are fundamental elements of the Adcock Ingram research and development DNA, as is the commitment to consistently evaluate its recognised and successful brands in order to continuously improve on formulation design. “We’re constantly transforming intellectual ideas from the boardroom, through scientific development and verification, to ensure consistency in the end product,”. the company says.

“Ultimately we aim to achieve the desired therapeutic effect in our consumers.”

Andy Hall, CEO, attributed a large share of Adcock Ingram’s most recently-released financial fortitude to exactly this: being dynamic, willing to change and diversify when required. “The Group’s pleasing set of financial results can be attributed to our diverse and affordable portfolio of brands and our ability to adapt to changing market dynamics,” he commented.

Among the standout figures was a 5% increase in turnover to reach R9.1 billion, while headline earnings per share (HEPS) increased by 12% to 561.3 cents and total dividend increased 17% to 250 cents per share. New products, including E45 from Karo Pharma, contributed 4.2% to the increase and overall price realisation of 3.4% was achieved in the period.

“The significantly weaker exchange rate, increased production costs and significant cost push from suppliers were mostly compensated for by improved factory throughput and efficiencies, as well as selling price increases in the non-regulated portfolio,” added Adcock Ingram. “The strength in the margin, combined with just a 3.1% increase in operating expenditure, led to a trading profit increase of 6.1% to R1.18 billion.”

“We are confident in the resilience of our portfolio of brands but remain cautious about the general state of our operating environment,” Hall concluded. “We welcome the recent ‘top-up’ Single Exit Price adjustment of 1.73%, which will assist in alleviating the margin pressures on our price-regulated basket of products.”