1st Quarter Results - Part 2
AstraZeneca PLC
23 April 2007
Consolidated Income Statement
2007 2006
For the quarter ended 31 March $m $m
Sales 6,966 6,180
Cost of sales (1,486) (1,251)
Distribution costs (61) (54)
Research and development (1,170) (861)
Selling, general and administrative costs (2,217) (2,115)
Other operating income 138 77
Operating profit 2,170 1,976
Finance income 247 200
Finance expense (150) (132)
Profit before tax 2,267 2,044
Taxation (703) (620)
Profit for the period 1,564 1,424
Attributable to:
Equity holders of the Company 1,560 1,425
Minority interests 4 (1)
1,564 1,424
Basic earnings per $0.25 Ordinary Share $1.02 $0.90
Diluted earnings per $0.25 Ordinary Share $1.02 $0.90
Weighted average number of Ordinary Shares in issue (millions) 1,527 1,579
Diluted average number of Ordinary Shares in issue (millions) 1,531 1,582
Consolidated Balance Sheet
At 31 March At 31 Dec
2007 2006
$m $m
ASSETS
Non-current assets
Property, plant and equipment 7,420 7,453
Intangible assets, including goodwill 4,447 4,204
Other investments 116 119
Deferred tax assets 1,296 1,220
13,279 12,996
Current assets
Inventories 2,294 2,250
Trade and other receivables 6,238 5,561
Other investments 849 657
Income tax receivable 1,338 1,365
Cash and cash equivalents 5,567 7,103
16,286 16,936
Total assets 29,565 29,932
LIABILITIES
Current liabilities
Interest bearing loans and borrowings (59) (136)
Trade and other payables (7,012) (6,334)
Income tax payable (3,278) (2,977)
(10,349) (9,447)
Non-current liabilities
Interest bearing loans and borrowings (1,087) (1,087)
Deferred tax liabilities (1,695) (1,559)
Retirement benefit obligations (1,772) (1,842)
Provisions (384) (327)
Other payables (256) (254)
(5,194) (5,069)
Total liabilities (15,543) (14,516)
Net assets 14,022 15,416
EQUITY
Capital and reserves attributable to equity holders of
the Company
Share capital 378 383
Share premium account 1,704 1,671
Other reserves 1,884 1,902
Retained earnings 9,941 11,348
13,907 15,304
Minority equity interests 115 112
Total equity 14,022 15,416
Consolidated Cash Flow Statement
For the quarter ended 31 March 2007 2006
$m $m
Cash flows from operating activities
Profit before taxation 2,267 2,044
Finance income and expense (97) (68)
Depreciation, amortisation and impairment 370 282
Increase in working capital (61) (365)
Other non-cash movements 88 41
Cash generated from operations 2,567 1,934
Interest paid (2) (12)
Tax paid (378) (410)
Net cash inflow from operating activities 2,187 1,512
Cash flows from investing activities
Acquisition of businesses* (143) (203)
Movement in short term investments and fixed deposits* (193) (1,524)
Purchase of property, plant and equipment (222) (181)
Disposal of property, plant and equipment 13 12
Purchase of intangible assets (183) (108)
Purchase of non-current asset investments - (14)
Disposal of non-current asset investments - 54
Interest received 113 65
Dividends paid by subsidiaries to minority interests (1) (4)
Net cash outflow from investing activities (616) (1,903)
Net cash inflow/(outflow) before financing activities* 1,571 (391)
Cash flows from financing activities
Proceeds from issue of share capital 33 362
Repurchase of shares (1,184) (564)
Dividends paid (1,878) (1,442)
Movement in short term borrowings (10) 2
Net cash outflow from financing activities (3,039) (1,642)
Net decrease in cash and cash equivalents in the period (1,468) (2,033)
Cash and cash equivalents at the beginning of the period 6,989 4,895
Exchange rate effects (1) 7
Cash and cash equivalents at the end of the period 5,520 2,869
Cash and cash equivalents consists of:
Cash and cash equivalents 5,567 2,954
Overdrafts (47) (85)
5,520 2,869
Note: Free Cash Flow (*) of $1,907 million (2006: $1,336 million) is calculated
as; net cash inflow/(outflow) before financing activities, adjusted for:
acquisition of businesses, movements in short term investments and fixed
deposits.
Consolidated Statement of Recognised Income and Expense
For the quarter ended 31 March
2007 2006
$m $m
Profit for the period 1,564 1,424
Foreign exchange adjustments on consolidation (22) 87
Available for sale (losses)/gains taken to equity (2) 18
Actuarial gains for the period 84 151
Tax on items taken directly to reserves (16) (33)
44 223
Total recognised income and expense for the period 1,608 1,647
Attributable to:
Equity holders of the Company 1,605 1,647
Minority interests 3 -
1,608 1,647
Notes to the Interim Financial Statements
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
The unaudited financial statements for the quarter ended 31 March 2007 have been
prepared in accordance with International Accounting Standards and International
Financial Reporting Standards (collectively 'IFRS') as adopted by the European
Union (EU). Details of the accounting policies applied are those set out in
AstraZeneca PLC's Annual Report and Form 20-F Information 2006.
The information contained in Note 3 updates the disclosures concerning legal
proceedings and contingent liabilities in the Company's Annual Report and Form
20-F Information 2006.
These interim financial statements do not constitute statutory accounts of the
Group within the meaning of Section 240 of the Companies Act 1985. Statutory
accounts for the year ended 31 December 2006 will be filed with the Registrar of
Companies following the Company's Annual General Meeting. The auditors' report
on those accounts was unqualified and did not contain any statement under
Section 237 of the Companies Act 1985.
2 NET CASH FUNDS
The table below provides an analysis of net cash funds and a reconciliation of
net cash flow to the movement in net cash funds.
At 1 Jan Cash Non-cash Exchange At 31 March
flow Acquisitions movements movements 2007
2007
$m $m $m $m $m
$m
Loans due after 1 year (1,087) - - - - (1,087)
Other investments - current 657 193 - (1) - 849
Cash and cash equivalents 7,103 (1,535) - - (1) 5,567
Overdrafts (114) 67 - - - (47)
Short term borrowings (22) 10 - - - (12)
7,624 (1,265) - (1) (1) 6,357
Net funds 6,537 (1,265) - (1) (1) 5,270
Non-cash movements in the period consist of fair value adjustments under IAS 39.
3 LEGAL PROCEEDINGS and commitments
AstraZeneca is involved in various legal proceedings typical to its business
including litigation relating to employment matters, product liability,
commercial disputes, infringement of intellectual property rights and the
validity of certain patents. The matters discussed below constitute the more
significant developments since the publication of the legal proceedings in the
Form 20-F filing in respect of the fiscal year ended 31 December 2006 and filed
with the SEC on 27 March 2007.
Matters disclosed in respect of the first quarter of 2007 and April 2007.
SeroquelTM
In March 2007, AstraZeneca received a notice from Sandoz, Inc. that Sandoz had
submitted an Abbreviated New Drug Application (ANDA) for quetiapine fumarate
25mg tablets. AstraZeneca's patent covering SeroquelTM tablets is listed in the
FDA's Orange Book. The Sandoz notice contained a Paragraph IV certification
alleging non-infringement and patent invalidity in respect of AstraZeneca's
listed patent covering SeroquelTM. Sandoz is the second generic drug
manufacturer to submit an ANDA containing a Paragraph IV certification and
seeking approval to market a 25mg quetiapine fumarate tablet. As disclosed in
November 2005, Teva Pharmaceuticals USA submitted the first ANDA seeking
approval to market 25mg quetiapine fumarate tablets and notifying AstraZeneca of
an ANDA submission to the FDA containing a paragraph IV certification. In
February 2006, Teva supplemented its ANDA to seek approval to market 100, 200
and 300mg quetiapine fumarate tablets.
In April 2007, AstraZeneca filed a patent infringement lawsuit in U.S. Federal
District Court, District of New Jersey, against Sandoz for patent infringement
in respect of its 25mg ANDA product. Currently pending in U.S. Federal District
Court, District of New Jersey, is AstraZeneca's consolidated ANDA patent
infringement action relating to Teva's ANDA for 25, 100, 200 and 300mg
quetiapine fumarate tablets.
In January 2007, Teva sought leave to amend its responsive pleadings in
AstraZeneca's consolidated lawsuit against Teva to add allegations, defenses,
and counter-claims directed to AstraZeneca's alleged inequitable conduct in the
procurement of its patent. AstraZeneca did not object to the Court granting
leave to amend, and, in March 2007, the Court allowed Teva to amend its
pleadings. Later in March 2007, AstraZeneca filed a responsive pleading denying
or contesting Teva's amended pleadings.
Government Investigation
AstraZeneca, along with several other manufacturers, has received a letter from
the Committee on Oversight and Government Reform of the U.S. House of
Representatives as part of the Committee's ongoing oversight of the
pharmaceutical industry's research and marketing practices. The Committee has
requested that AstraZeneca provide clinical and marketing information relating
to SeroquelTM. AstraZeneca is co-operating with the Committee's enquiry.
CrestorTM
As previously disclosed, AstraZeneca Pharmaceuticals LP and/or AstraZeneca LP in
the US were served with seven individual lawsuits in 2004 and 2005 involving
alleged injury in association with the use of CrestorTM. Five of these lawsuits
have now been dismissed. In addition, a motion for authorisation to institute a
class action and to be a representative was filed in Quebec, Canada against
AstraZeneca PLC and AstraZeneca Canada Inc., in which the petitioner alleged
injury as a result of the use of CrestorTM. This matter was dismissed in March
2007. During 2006, AstraZeneca was served with six additional individual
lawsuits in the US, all six of which have since been dismissed. AstraZeneca is
vigorously defending all the remaining actions.
4 FIRST QUARTER TERRITORIAL SALES ANALYSIS
% Growth
1st Quarter 1st Quarter Actual Constant
2007 2006 Currency
$m $m
US 3,234 2,882 12 12
Canada 254 250 2 2
North America 3,488 3,132 11 11
Western Europe 2,200 1,934 14 4
Japan 331 304 9 12
Other Established ROW 133 117 14 7
Established ROW* 2,664 2,355 13 5
Emerging Europe 246 238 3 -
China 92 72 28 25
Emerging Asia Pacific 169 149 13 8
Other Emerging ROW 307 234 31 29
Emerging ROW 814 693 17 14
Total Sales 6,966 6,180 13 9
* Established ROW comprises Western Europe (including France, UK, Germany,
Italy, Sweden and others), Japan, Australia and New Zealand.
5 FIRST QUARTER PRODUCT SALES ANALYSIS
World US
1st 1st Constant 1st
Quarter Quarter Actual Currency Quarter Actual
2007 2006 Growth Growth 2007 Growth
$m $m % % $m %
Gastrointestinal:
Nexium 1,308 1,189 10 8 862 9
Losec/Prilosec 279 344 (19) (22) 54 (2)
Others 20 18 11 6 7 -
Total Gastrointestinal 1,607 1,551 4 1 923 9
Cardiovascular:
Seloken/Toprol 444 456 (3) (4) 331 (7)
Crestor 628 387 62 59 343 56
Atacand 296 254 17 11 65 12
Tenormin 71 76 (7) (9) 5 (29)
Zestril 80 75 7 1 8 33
Plendil 65 72 (10) (14) 7 17
Others 69 70 (1) (7) 1 -
Total Cardiovascular 1,653 1,390 19 16 760 17
Respiratory:
Pulmicort 401 328 22 20 270 29
Symbicort 354 277 28 19 - -
Rhinocort 92 85 8 6 63 3
Oxis 23 22 5 (5) - -
Accolate 19 18 6 6 14 17
Others 42 35 20 11 - -
Total Respiratory 931 765 22 17 347 23
Oncology:
Arimidex 401 335 20 15 162 27
Casodex 310 274 13 9 73 11
Zoladex 249 231 8 4 22 (8)
Iressa 52 50 4 4 3 (25)
Others 84 68 24 21 39 50
Total Oncology 1,096 958 14 11 299 21
Neuroscience:
Seroquel 923 807 14 13 655 11
Local anaesthetics 126 132 (5) (9) 8 (67)
Zomig 107 93 15 11 47 18
Diprivan 59 89 (34) (36) 9 (74)
Others 12 15 (20) (27) 2 (50)
Total Neuroscience 1,227 1,136 8 6 721 4
Infection and Other:
Merrem 178 141 26 21 35 21
Other Products 74 68 9 3 38 15
Total Infection and Other 252 209 21 15 73 18
Aptium Oncology 98 88 11 11 98 11
Astra Tech 102 83 23 13 13 44
Total 6,966 6,180 13 9 3,234 12
Shareholder Information
ANNOUNCEMENTS AND MEETINGS
Annual General Meeting 26 April 2007
Announcement of second quarter and half year 2007 results 26 July 2007
Announcement of third quarter and nine months 2007 results 1 November 2007
DIVIDENDS
The record date for the second interim dividend for 2006 paid on 19 March 2007
(in the UK, Sweden and the US) was 9 February 2007. Ordinary shares traded
ex-dividend on the London and Stockholm Stock Exchanges from 7 February 2007.
ADRs traded ex-dividend on the New York Stock Exchange from the same date.
Future dividends will normally be paid as follows:
First interim Announced in July and paid in September
Second interim Announced in January/February and paid in March
TRADEMARKS
The following brand names used in these interim financial statements are
trademarks of the AstraZeneca Group of companies:
Accolate Arimidex Astra Tech Atacand Casodex Crestor Diprivan Faslodex
Iressa Losec Merrem Nexium Nolvadex Oxis Plendil Prilosec Pulmicort
Pulmicort Respules Pulmicort Flexhaler Rhinocort Rhinocort Aqua Seloken
Seroquel Symbicort Tenormin Toprol-XL Zestril Zoladex Zomig
ADDRESSES FOR CORRESPONDENCE
Registrar and Depositary Registered Office Swedish Securities
Registration Centre
Transfer Office for ADRs
VPC AB
The AstraZeneca Registrar JPMorgan Chase Bank 15 Stanhope Gate
PO Box 7822
Lloyds TSB Registrars JPMorgan Service Center London
SE-103 97 Stockholm
The Causeway PO Box 3408 W1K 1LN
Sweden
Worthing South Hackensack UK
West Sussex NJ 07606-3408
BN99 6DA US
UK
Tel: +46 (0)8 402 9000
Tel (freephone in UK): Tel (toll free in US): Tel: +44 (0)20 7304 5000
0800 389 1580
888 697 8018
Tel (outside UK):
+44 (0)121 415 7033 Tel: +1 (201) 680 6630
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
In order to utilise the 'safe harbour' provisions of the US Private Securities
Litigation Reform Act 1995, we are providing the following cautionary statement:
These interim financial statements contain certain forward-looking statements
about AstraZeneca. Although we believe our expectations are based on reasonable
assumptions, any forward-looking statements may be influenced by factors that
could cause actual outcomes and results to be materially different from those
predicted. We identify the forward-looking statements by using the words '
anticipates', 'believes', 'expects', 'intends' and similar expressions in such
statements. These forward-looking statements are subject to numerous risks and
uncertainties. Important factors that could cause actual results to differ
materially from those contained in forward-looking statements, certain of which
are beyond our control, include, among other things: the loss or expiration of
patents, marketing exclusivity or trade marks; the risk of substantial adverse
litigation/government investigation claims and insufficient insurance coverage;
exchange rate fluctuations; the risk that R&D will not yield new products that
achieve commercial success; the risk that strategic alliances will be
unsuccessful; the impact of competition, price controls and price reductions;
taxation risks; the risk of substantial product liability claims; the impact of
any failure by third parties to supply materials or services; the risk of
failure to manage a crisis; the risk of delay to new product launches; the
difficulties of obtaining and maintaining regulatory approvals for products; the
risk of failure to observe ongoing regulatory oversight; the risk that new
products do not perform as we expect; the risk of environmental liabilities; the
risks associated with conducting business in emerging markets; the risk of
reputational damage; and the risk of product counterfeiting.
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 6 minutes ago Savills
- 7 minutes ago React Group
- 8 minutes ago Oxford Nanopore Technologies
- 20 minutes ago LSL Property Services
- 38 minutes ago Ninety One