Full Year Results 1999

Full Year Results 1999 'Profit growth and market share gains follow successful merger' Full Year Financial Highlights Operations before Exceptional Items § Actual Pro Forma Constant 1999 1998 Currency $m $m % Sales: Continuing (excl. 17,791 15,823 + 13 Specialties) Group 18,445 17,117 + 9 Operating Profit: Continuing (excl. 3,837 3,361 + 15 Specialties) Group 3,908 3,507 + 12 Earnings per Share: Continuing (excl. $1.51 $1.30 + 17 Specialties) Group $1.54 $1.36 + 14 Group (Statutory $0.64 $1.47 FRS3) Following the announcement on 2 December 1999 of the proposed spin-off and merger of Agrochemicals with the agrochemicals and seeds activities of Novartis to form Syngenta AG, the results for AstraZeneca on an 'ongoing' basis, ie excluding the results of Agrochemicals and Specialties, are shown and described below: Ongoing Operations before Exceptional Items Actual Pro Constant § 1999 Forma $m 1998 Currency $m % Sales 15,134 13,033 + 17 Operating Profit 3,570 3,002 + 20 Earnings per Share $1.41 $1.17 + 22 § Pro forma Basis: see basis of calculation description on page 19. All narrative in this section refers to pro forma growth rates for ongoing operations at constant exchange rates. Tom McKillop, Chief Executive, said: "These results are testimony to the success of the AstraZeneca merger which has delivered profit and market share gains. Decisive actions have been taken to focus on our Healthcare operations ensuring AstraZeneca's position as a leading, global Pharmaceuticals company. All key development projects are on track and continued investment in our strong portfolio will deliver excellent returns for shareholders." * Sales up 17 per cent; Pharmaceuticals sales up 18 per cent * US Pharmaceuticals sales up 23 per cent * Operating profit up 20 per cent; Pharmaceuticals operating profit up 19 per cent to $3,603 million * Operating margin increased to 23.6 per cent; Pharmaceuticals operating margin increased to 24.3 per cent London, 24 February 2000 AstraZeneca PLC Fourth Quarter Results 1999 Fourth Quarter Financial Highlights Operations before Exceptional Items Actual Pro 4 th § Forma Constant 4 th Quarter 1999 Quarter Currency $m 1998 $m % Sales: Ongoing 3,916 3,692 + 9 Group 4,493 4,544 + 1 Operating Profit: Ongoing 796 794 + 1 Group 789 829 - 3 Earnings per Share: Ongoing $0.32 $0.31 + 5 Group $0.32 $0.32 + 2 Ongoing operations excludes the results of Agrochemicals (to be discontinued) and Specialties (discontinued). The following narrative refers to the growth rates for ongoing operations at constant exchange rates. * Ongoing sales up 9 per cent; Pharmaceuticals sales up 10 per cent * Stocking patterns, particularly by US wholesalers, strongly influenced the third and fourth quarter Pharmaceuticals sales: 3rd Quarter, up 31 per cent; 4th Quarter, up 10 per cent; 2 nd Half, up 19 per cent * Prescription demand in the USA remained strong throughout the fourth quarter * Operating profit up 1 per cent; Pharmaceuticals operating profit was influenced by third and fourth quarter sales trends; 3rd Quarter, up 58 per cent; 4th Quarter, flat; 2 nd Half up 25 per cent Group Statutory Basis (including Discontinued Operations and Exceptional Items) th th 4 4 Quarter Quarter 1999 1998 Earnings per Share $(0.10) $0.40 (FRS3) § Pro forma Basis: see basis of calculation description on page 19. London, 24 February 2000 Media Steve Brown/Lucy Williams (London) (020) 7304 Enquiries: 5033/5034 Mikael Widell (London) (020) 7304 5030 Staffan Ternby (Södertalje) (8) 553 26107 Rachel Bloom (Wilmington) (302) 886 7858 Analyst/Investo Elizabeth Sutton/Michael Olsson (London) (020) 7304 r Enquiries: 5101/5087 Staffan Ternby (Södertalje) (8) 553 26107 Ed Seage (Wilmington) (302) 886 4065 Jörgen Winroth (Wayne) (609) 896 4148 Chief Executive Officer's Review of Operations All narrative in this section refers to pro forma growth rates at constant exchange rates (CER). 1999 has been an exciting year. AstraZeneca was formed on 6 April and since then we have restructured the group. The sale of Specialties in June was followed by the announcement in December of the intent to create the first dedicated, global agribusiness, Syngenta, by spinning off and merging our agrochemicals business with the agrochemicals and seeds interests of Novartis. Thus AstraZeneca is now a leading, global healthcare company focused on Pharmaceuticals. Close attention to running the business, even during the intense merger activity, has delivered an increased market share for ethical pharmaceuticals. To the best of our knowledge, this is the first time that a major pharmaceutical company merger has produced an increase in market share. As a result, AstraZeneca has consolidated its position as the largest ethical pharmaceutical company in the world in terms of sales with a global market share of 4.3 per cent. (Source IMS Health: MIDAS MAT Q3 99 - includes pharmacy and hospital sales as audited by IMS Health, excludes US mail order). The core pharmaceutical business delivered full year sales and profits growth of 18 per cent and 19 per cent respectively. A particularly strong performance was registered in the USA with growth of 23 per cent. Importantly this growth has not only come from the continued success of Losec ®/Prilosec ® and Zestril ® but also by excellent performances from a range of newer products including Casodex ® ($340 million), Seroquel ® ($232 million) and Atacand ® ($171 million). Integration has proceeded quickly and well with the 1999 synergy benefits of $130 million being slightly ahead of forecast. Further details on this programme are provided on page eight of this report. Earnings per Share for AstraZeneca's core ongoing business focused on Healthcare (mainly Pharmaceuticals) was $1.41, a growth of 22 per cent, which provides further evidence of the achievements and focus of 1999. In accordance with the new dividend policy, as described in the Interim Report in August, the Board has recommended a second interim dividend of $0.47 (29.1 pence, SEK4.01) which will be paid on 17 April 2000. Together with the first interim dividend this gives a total dividend for the year of $0.70 (43.3 pence, SEK5.90) per share. Our cash position is strong and in December we commenced the share re- purchase programme announced in August. By the end of the year we had purchased for cancellation 4,338,444 of the Ordinary Shares (nominal value $0.25 each) for an aggregate sum of $183 million. This represents 0.24 per cent of the total issued share capital of AstraZeneca. Turning to some of the highlights and issues of the fourth quarter . . . Wholesaler buying patterns in the USA significantly distorted the balance of third and fourth quarter results, particularly for Prilosec ® , Seloken ® , Pulmicort ® and Rhinocort ® which all experienced higher than normal levels of buying during the third quarter. The underlying performance in the fourth quarter was strong with continued prescription volume growth across the product range. Some Year 2000 advance buying was experienced principally in some European and Asian markets, estimated at around $70 million. We continue to make good progress in the defence of Losec ® /Prilosec ® patents. In particular, we welcome the decision by the German Supreme Court to refer the Losec ® Supplementary Protection Certificate (SPC) case to the European Court of Justice. The referral means that the German interpretation of the applicability of SPCs will be judged in the context of the EU as a whole which should better reflect the original intention of SPCs as a mechanism for patent term restoration. At the R & D presentations in London and New York in December, we presented information on our exciting pipeline; Nexium - our next generation Proton Pump Inhibitor (PPI), ZD4522 - the super-statin, H376/95 - our oral thrombin inhibitor, the respiratory drug Viozan and fast- tracking of the novel anti-cancer agent Iressa were all highlighted. All are progressing well through development towards the market. Good progress is being made in Europe and the USA with the regulatory review of Nexium . The European filing was completed for Symbicort ® , which is expected to be a significant addition to our respiratory portfolio. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/02/24/20000224BIT00020/bit0001.doc The full report http://www.bit.se/bitonline/2000/02/24/20000224BIT00020/bit0002.pdf The full report