Good afternoon and welcome. Thank you for joining today's live webcast, where we will discuss the completion of the divestment of Aspen APAC, the transaction that was announced late last year. Mr. Stephen Saad will begin with some remarks on the transaction, after which we will open the floor to questions specifically relating to the transaction. Both Stephen and Sean Capazorio are available to answer your questions. Please submit your questions through the webcast platform. If I can ask you to identify yourself as you do, and we will address them following Stephen's overview. Alternatively, you can reach out to both Sane and myself, and we'll happily follow up after the call. I'm now going to hand it over. Good afternoon, Stephen.
Good afternoon, everyone, and good afternoon to all of you, and thank you for joining us. Apologies, we'd actually planned for this to be on Monday, but it looks like the Strait of Hormuz opened for us a little earlier, thankfully. I think today is a significant milestone for Aspen, being the successful completion of the divestment of our Asia Pacific business. All the condition precedents have been fulfilled and the transaction closed in line with the terms we gave you in our circular. Just to remind you some of the conditions that we had included moving licenses across, which could have, one, either turned the deal, or two, result in change of value. I'm happy to say that we've managed to achieve all of that successfully without any loss of value. We're going to look ahead, of course, to understand where we head to from here.
I think let's just spend a bit of time just reflecting on the business that is represented in Asia Pacific. I remind you it was a startup, and over time, it developed into a leading provider of quality pharmaceuticals in Australasia and a growing presence in Asia, too. If I go back in time, before we divested our generic business, at one stage, I think I'm quite close on this, but in one stage we were supplying one in every five medicines that were dispensed into the Australian market. Incredible penetration and an unbelievable business that was created. In FY 2025, so our financial years are June, APAC was about ZAR 2.4 billion, and it was about just over a quarter of our EBITDA. I think it's clear that the value from the divestment is compelling.
Every shareholder voted in favor of it, and it also gives tangible evidence of the value that Aspen has been able to create over time. I think it puts a value on Aspen's underlying assets, and I think this is something you've heard from us in the past, about that value. I think this is a demonstration of that value, and it continues to support the view that we have that the current share price doesn't reflect the intrinsic sum of parts. I think it's even more relevant now because if you think about now, it's a context of a business now with a stronger balance sheet and it's got very good future organic earnings growth profile from continuing operations. We'll talk about that, but obviously there's drivers in the emerging markets. There's GLP-1s where we're very well positioned. Those are the weight loss products.
We've got facilities that have been heavily invested in that require filling and all of that will add value. If we just spend a little bit of time on the numbers here. The valuation achieved was 11.5 x the EBITDA, so it was a good value and a much higher value than the rest of our business, which I've told you, has got some good reasons to be excited by the balance. We received it in full and the transaction proceeds, that is. I think the transaction costs have been really well managed. We seldom use advisors as Aspen, and it's well managed in line with the guidance we provided earlier. We were fortunate in that the exchange rates movements were positive for us and we did some fairly effective hedging. Well done to our Treasury team.
We've got proceeds of over ZAR 28 billion and, in the circular, we said it would be just over ZAR 26 billion. A big change. To give you a sense of the sensitivity, when the euro was 1.64 to an Australian dollar , if it dropped just by EUR 0.01 to EUR 1.63, change alone was ZAR 150 million at a time. Some really big movements in exchange rates. The gross proceeds of ZAR 28, our estimate is that we would receive ZAR 27 billion net. It's a couple of billion more than the ZAR 25 billion we told you on the circular. We're going to use the proceeds to reduce debt, which obviously has a materially strengthens our balance sheet. When I think about strengthening our balance sheet, let's be candid, there's never a wrong time to have a very strong balance sheet.
Aspen is a very global company, and our experience in, say, the last six years versus 16, the 10 years before that, is the world's become a pretty choppy place. You keep thinking, Well, this will be the last hiccup. It seems to not be a one in 10 year event. It seems like you're getting challenged even more than once a year. I think in terms of timing, it's a good time to have a strong balance sheet. Obviously, leverage has reduced significantly. I had a chat to Sean, and if we're not in net cash, we're very close to a net cash position today. It's the first time I've been able to say that in 30 years. It's a sort of defining moment for us, too, because we've never issued any shares.
What it really means is that every transaction that we've done, every facility we've built, and there have been many of both over this period, have all been fully paid up without having to come back to our shareholders. I think the net result is we can't argue is we have all the assets, and we don't have any debt against them. Logically, the finance costs will decline significantly, meaningfully, and we've obviously got increased financial flexibility. We're completely in a different situation from where we've ever been in the past. There's a material enhancement of that flexibility. Where does that take us to going forward? What is our focus from here? It's not dissimilar to what we shared with you in our interim results presentation. We've got strong growth drivers in our balance of our business.
If we take what we made in financial year 2025, which was ZAR 9.6 billion, we adjust it and we say, Listen, we want to get back to there by 2027. To get back there, we've got to cover for two big holes there. One, the divestment of this business. Two, the loss of the mRNA contract. Between those two events, we about ZAR 3 billion less, so to ZAR 3.6 billion less. If we grow the base business by 60% in the next couple of years, we'd get to ZAR 9.6 billion. That's a big ask, a big organic ask. What would support it? If I look at our commercial pharma business, well, we've got a larger percentage of our business now, commercial pharma, in emerging markets.
That's important because over the last 20 years, you would have noticed within Aspen we've had very strong organic volume growth, and there's just a growing middle class there who demand a quality branded medicine. I think that's known and understood, and now it's a bigger part, as I say, a bigger percentage of the business. Then we've got two real opportunities, big opportunities in the GLP-1 field. One, Mounjaro. We've been doing fantastically in South Africa. We are now moving to expand across sub-Saharan Africa. The first target territories are Nigeria and Kenya. Then we've got GLP-1 launches. We expect our products in Canada and some key emerging markets as well. We look well positioned there as well. In terms of our sterile manufacturing, it's been a massive focus for us in this period and going into next year.
What's key to us is to restore the loss-making facilities in France and South Africa to profitability by financial year 2027. To do that, we're going to have to reshape our cost base, and we've got to commercialize an insulin contract. Just successful execution of those two will result in an EBITDA upliftment of ZAR 1.7 billion. We're well on track to achieve those milestones. In addition, what are we trying to do? We're also securing regulatory approval for the pediatric vaccines we have from Serum, and that has progressed well. You would have seen the discussions we've had with the Africa CDC. Also, we'd look to try and do further contracts, and we are in discussions around further contracts, as well as bringing our GLP-1 injectable volumes into our facilities, both into France and South Africa.
If we bring those products incrementally products into our facility, we really have enhanced profitability because it's now of a largely fully absorbed fixed cost base. What else are we looking at? Let's talk a little bit about cash generation and capital discipline. Is that we've had a[audio distortion] on free cash flow. How are we driving that? Well, we've got our operating cash conversion ratios, which we want to maintain, and they've been consistently about 100% or above. We've got reduced capital expenditure because we're done with our facilities, and we spend most of the money we need to spend on creating and building the intellectual property base around GLP-1s. We'll have a lower working capital intensity. I think therein is quite an advantage for us because we have a very strong invested capital base. The growth opportunities sit within these existing assets.
What does that mean? We're not dependent on having to build a new facility to deliver the growth that we hope to achieve. Our focus is really on execution. We're not worried about our IP. We're getting really good feedback on the GLP-1 IP. Our focus is execution and returns of an existing asset base. Earnings growth, obviously in a situation where you're growing earnings without investing a lot of capital will mean more free cash generation. A strong balance sheet combined with the clear organic growth drivers position Aspen really well to continue delivering and improving returns. The enhanced balance sheet flexibility gives us a chance to consider share buybacks. If we believe there's a disjunct between this and the sum of parts, then we've got to consider share buybacks as a means of delivering returns to shareholders.
With that, really, before we go to questions, I'd like to just thank those who contributed to the success of the transaction. Our teams did fantastically across the group to deliver this and deliver it in full. Our advisors, partners, and all stakeholders involved. I'd like to give a particular mention to those that fronted it all up in Australia over Christmas and New Year, and to our external advisor, to Chris Mortimer, who's a champion, and to Michelle Else and her legal team, internal legal team. Thank you for all you've done. To our team in Mauritius, Samer , Pauline, and the team, who've done a fantastic job in making sure that this did happen. I think most importantly, I'd like to recognize the management team and all the employees of our APAC businesses for their commitment and their contribution over many years.
There's an overwhelming sense of gratitude, really, to have had a privilege that very few others would ever get. We're so thankful to have an opportunity to be part of building this business in Australia. In truth, not just Australia. To have an opportunity anywhere in the world is a privilege. From a startup to a business that is worth ZAR 28 billion. Mostly has contributed so meaningfully to society. What is achieved, in our humble opinion, is remarkable and something all of us are immensely proud of. Going back to the team, I really need to thank you. I thank you for your commitment. I know it's late now in Australia, but really, you're testament to the success of our federated model. To grow this business organically across so many geographies, we've had to put trust in people.
We just simply couldn't visit and oversee everybody in every place. It really gave testament to the belief and trust we have had in our people over the years. We thank you because you took this trust so seriously, and you never gave us cause to waver. I can only wish you every success in your next phase. You certainly have more than earned your stripes, and you deserve to be center stage as you grow and you shape the new business. Moments like these are never easy. It's a bit like watching your children leave home. I think it's so much easier when you know that your investment in them has left them equipped to manage that all life can throw at them. Trevor, to you and your team, I can only say well done. You've established an absolutely rock solid business.
I think you've got a perfect platform to launch the next chapter. As I said, you've earned your stripes. You deserve to be center stage. I'm really looking forward to working closely together with you and the team into the future. Really go out there and continue to make us proud. That's all I can say to you and the team. Thank you once again, and thank you, everyone.
Thank you very much, Stephen. I think everybody has been listening quite intently. Just a reminder, if you do want to send through any questions, please do so through the webcast. Stephen, if we can just give it 30 seconds. There's no questions that have been lined up at the moment, so it's obviously pretty clear. Let's just give it 30 seconds and see if any come through.
Roy, there can't be anything clearer than having cash. You shouldn't have to discuss a whole lot of other issues.
Yeah, exactly. I think they want to know what you're going to do with the cash. I think it's been quite clear in your overview. Just looking at my colleague, Stephen, to Sane. Sane, any questions?
No, nothing.
All right. No questions are coming through. What I think, if there are any questions, please feel free to email either myself or Sane, and we'll happily follow up. Stephen, Sean, any closing remarks? Otherwise, we'll close the call.
I think from my side, clearly, I've said it all. There are no calls. Sean, from your side?
I think I've got free cash flow on my head, and I'm really looking forward to driving a stronger free cash flow going forward.
Okay. Quick questions are coming through. They all relate to the capital allocation. Have you got authority for SBB? Share buybacks, presume that is. Have you got authority? Yes, we do have authority.
Is it up to 20%, Roy? I can't remember what the authority is.
20%. We've got approval for 20% per annum.
I think that's it. It's just whether we've got authority to do share buybacks.
Okay. Great. Thank you.
Thank you, Sean. Thank you very much for joining. Yeah, Stephen, I'll let you close it off.
No, thank you. Thank you, all. It's a pleasure, one, to announce this. We've had trickier ones and easier ones, and this has probably been one of the more pleasant. A lot of hard work gone into it, and we're really in a great position now. It's to cement the advantage that we've earned. Thank you, everyone, and thank you for your time. Cheers.