South Africa results: Adcock CHC sales power forward in H2

South Africa’s No.1 CHC marketer, Adcock Ingram, said that its OTC division “recovered in amazing fashion” in H2 2021, driven by “increased demand for cough, cold & flu products”. The company’s unaudited results showed that overall turnover rose by 16% to R4.3bn (US$282mn) in the six months ended 31st December 2021, driven by volume growth of 9% and a mix benefit of 6% from new products, increased marketing activity on behalf of multinational partners and brand innovation.

  • OTC turnover grew by 26.4% to R993.9mn (US$65mn), arising from the relaxation in Covid-19 restrictions, which resulted in improved demand across the cough & cold portfolio vs the difficult comparative period. Citro-Soda, Allergex and Corenza-C all posted double-digit ex-factory growth
  • Consumer was up 32.7% to R795mn (US$52mn) supported by the inclusion of Epi-max (+15.3%) from 1st January 2021, when it was transferred from the Prescription division. On a like-for-like basis, sales improved 13.6% with key brands posting healthy growth, most notably painkiller Panado, driven by a marketing campaign linked to Covid vaccinations

Not all was rosy in the South African market, however. Following the disposal of its Animal Health and Respiratory Health Africa businesses, Ascendis Health’s remaining operations – Medical Devices, Pharma and Consumer Brands – reported an 18% decline in revenue to R1bn (US$65mn) in the six months to end-December 2021. Consumer Brands – R340mn / US$22mn, up by 1% – encountered headwinds in contract manufacturing plus the closing of and slower-than-expected re-opening of beauty salons. Port strikes and global supply chain challenges also impacted strategic procurement business Chempure. 

Following completion of a Recapitalisation Plan, which shareholders voted for in 2021, the Board will focus on rebuilding the company through a sustainable growth strategy. This includes optimising the Consumer Brands business, one of the largest VMS suppliers in S Africa, which presents a “compelling base for the group’s growth prospects”. The portfolio comprises seven key brands including Solal, Vitaforce, Menacal, Bettaway and Junglevite. Another pillar for growth is expansion via acquisitions. The Board is exploring opportunities to purchase “scalable, earnings-enhancing businesses in the broader consumer products sector”.

If you are looking to fill a gap in your business, Nicholas Hall’s executive recruitment service CHC TalentSelect may be able to help. With over 40 years’ experience in connecting people in the consumer healthcare industry, please get in touch with maricar.montero@NicholasHall.com to start your search.