3rd Quarter Results - Part 2
AstraZeneca PLC
26 October 2006
Consolidated Income Statement
2006 2005
For the nine months ended 30 September $m $m
Sales 19,321 17,664
Cost of sales (3,981) (3,968)
Distribution costs (165) (155)
Research and development (2,778) (2,506)
Selling, general and administrative costs (6,585) (6,292)
Other operating income 401 123
Operating profit 6,213 4,866
Finance income 621 484
Finance expense (394) (372)
Profit before tax 6,440 4,978
Taxation (1,822) (1,481)
Profit for the period 4,618 3,497
Attributable to:
Equity holders of the Company 4,611 3,482
Minority interests 7 15
4,618 3,497
Basic earnings per $0.25 Ordinary Share $2.93 $2.14
Diluted earnings per $0.25 Ordinary Share $2.92 $2.14
Weighted average number of Ordinary Shares in issue (millions) 1,572 1,626
Diluted average number of Ordinary Shares in issue (millions) 1,578 1,627
Dividends declared in the period 2,217 1,676
Consolidated Income Statement
2006 2005
For the quarter ended 30 September $m $m
Sales 6,516 5,789
Cost of sales (1,339) (1,245)
Distribution costs (53) (51)
Research and development (962) (781)
Selling, general and administrative costs (2,180) (2,056)
Other operating income 124 39
Operating profit 2,106 1,695
Finance income 221 168
Finance expense (140) (120)
Profit before tax 2,187 1,743
Taxation (595) (513)
Profit for the period 1,592 1,230
Attributable to:
Equity holders of the Company 1,587 1,223
Minority interests 5 7
1,592 1,230
Basic earnings per $0.25 Ordinary Share $1.01 $0.76
Diluted earnings per $0.25 Ordinary Share $1.01 $0.76
Weighted average number of Ordinary Shares in issue (millions) 1,562 1,611
Diluted average number of Ordinary Shares in issue (millions) 1,569 1,613
Consolidated Balance Sheet
As at As at As at
30 31 30
September December September
2006 2005 2005
$m $m $m
ASSETS
Non-current assets
Property, plant and equipment 7,297 6,985 7,262
Intangible assets, including Goodwill 4,710 2,712 2,763
Other investments 137 256 239
Deferred tax assets 1,545 1,117 1,168
13,689 11,070 11,432
Current assets
Inventories 2,209 2,206 2,493
Trade and other receivables 5,404 4,778 4,776
Other investments 413 1,624 1,242
Income tax receivable 651 183 184
Cash and cash equivalents 5,756 4,979 4,400
14,433 13,770 13,095
Total assets 28,122 24,840 24,527
LIABILITIES
Current liabilities
Interest bearing loans and borrowings (113) (90) (122)
Trade and other payables (5,780) (5,466) (5,404)
Income tax payable (2,195) (1,283) (1,215)
(8,088) (6,839) (6,741)
Non-current liabilities
Interest bearing loans and borrowings (1,089) (1,111) (1,122)
Deferred tax liabilities (1,772) (1,112) (1,217)
Retirement benefit obligations (1,752) (1,706) (1,678)
Provisions (329) (309) (316)
Other payables (309) (72) (84)
(5,251) (4,310) (4,417)
Total liabilities (13,339) (11,149) (11,158)
Net assets 14,783 13,691 13,369
EQUITY
Capital and reserves attributable to equity holders of
the Company
Share capital 388 395 399
Share premium account 1,620 692 638
Other reserves 1,856 1,831 1,866
Retained earnings 10,819 10,679 10,372
14,683 13,597 13,275
Minority equity interests 100 94 94
Total equity 14,783 13,691 13,369
Consolidated Cash Flow Statement
2006 2005
For the nine months ended 30 September $m $m
Cash flows from operating activities
Profit before taxation 6,440 4,978
Finance income and expense (227) (112)
Depreciation and amortisation 917 933
(Increase)/decrease in working capital (164) 72
Other non-cash movements 241 175
Cash generated from operations 7,207 6,046
Interest paid (35) (15)
Tax paid (1,639) (1,217)
Net cash inflow from operating activities 5,533 4,814
Cash flows from investing activities
Acquisition of businesses (1,170) -
Movement in short term investments and fixed deposits 1,353 (101)
Purchase of property, plant and equipment (565) (586)
Disposal of property, plant and equipment 20 77
Purchase of intangible assets (489) (137)
Purchase of non-current asset investments (15) (6)
Disposal of non-current asset investments 54 -
Interest received 259 137
Dividends paid by subsidiaries to minority interest (4) (5)
Net cash outflow from investing activities (557) (621)
Net cash inflow before financing activities 4,976 4,193
Cash flows from financing activities
Proceeds from issue of share capital 934 76
Repurchase of shares (2,958) (2,182)
Dividends paid (2,220) (1,717)
Movement in short term borrowings 36 8
Net cash outflow from financing activities (4,208) (3,815)
Net increase in cash and cash equivalents in the period 768 378
Cash and cash equivalents at the beginning of the period 4,895 3,927
Exchange rate effects 22 (16)
Cash and cash equivalents at the end of the period 5,685 4,289
Cash and cash equivalents consists of:
Cash and cash equivalents 5,756 4,400
Overdrafts (71) (111)
5,685 4,289
Consolidated Statement of Recognised Income and Expense
For the nine months ended 30 September 2006 2005
$m $m
Profit for the period 4,618 3,497
Foreign exchange adjustments on consolidation 565 (910)
Available for sale losses taken to equity (11) -
Actuarial loss for the period (13) (19)
Tax on items taken directly to reserves 95 4
Total recognised income and expense for the period 5,254 2,572
Attributable to:
Equity holders of the Company 5,248 2,571
Minority interests 6 1
5,254 2,572
Notes to the Interim Financial Statements
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
The unaudited financial statements for the nine months ended 30 September 2006
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 2005.
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 2005.
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 2005 have been filed with the Registrar
of Companies. 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 Cash Non-cash Exchange At 30
Jan Flow Acquisitions Movements Movements Sept
2006 2006
$m $m $m $m $m $m
Loans due after 1 year (1,111) - - 22 - (1,089)
Other investments - current 1,624 (1,353) 157 (19) 4 413
Cash and cash equivalents 4,979 754 - - 23 5,756
Overdrafts (84) 14 - - (1) (71)
Short term borrowings (6) (36) - - - (42)
6,513 (621) 157 (19) 26 6,056
Net funds 5,402 (621) 157 3 26 4,967
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 considered 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 publication of the disclosures concerning legal
proceedings in the Company's Annual Report and Form 20-F Information 2005 and
Half Year Results 2006.
Losec MUPSTM (omeprazole) / NexiumTM tablets (esomeprazole magnesium)
An oral hearing is scheduled to take place at the European Patent Office (EPO)
on 26 October 2006 to hear appeals concerning the validity of an AstraZeneca
formulation patent in Europe relating to Losec MUPSTM and NexiumTM tablets. The
final decision of the EPO in these proceedings is expected to be announced on
the same date. The European patent that is the subject of these proceedings
relates only to NexiumTM in tablet formulation. Should there be a negative
decision in respect of the formulation patent, AstraZeneca would continue to
have a comprehensive intellectual property portfolio protecting NexiumTM itself,
including several patents and data exclusivity.
An oral hearing is scheduled to take place at the EPO on 19 December 2006 to
hear an appeal concerning the validity of an AstraZeneca substance patent in
Europe relating to NexiumTM. The final decision of the EPO in these proceedings
is expected to be announced on the same date.
NexiumTM (esomeprazole magnesium)
In August 2006, AstraZeneca received a notice from Dr Reddy's Laboratories, Inc.
and Dr Reddy's Laboratories, Ltd. that they had submitted an Abbreviated New
Drug Application to the US Food and Drug Administration for esomeprazole
magnesium delayed-release capsules, 20mg and 40mg, containing paragraph IV
certifications of invalidity and/or non-infringement in respect of some, but not
all, of AstraZeneca's US patents listed in the FDA's Orange Book with reference
to NexiumTM.
In particular, the notice from Dr Reddy's did not challenge three Orange
Book-listed patents claiming esomeprazole magnesium (US patents numbers
5,714,504; 5,877,192; and 6,875,872). AstraZeneca's exclusivity relating to
these three patents expires in 2014 and 2015 and Dr Reddy's cannot market
generic esomeprazole magnesium in the US until the end of the exclusivity
afforded by these patents. As a result, AstraZeneca has not commenced
proceedings against Dr Reddy's in response to the ANDA filing.
AstraZeneca has full confidence in, and will continue vigorously to defend and
enforce, its intellectual property rights protecting NexiumTM, including those
patents listed in the FDA's Orange Book.
SeroquelTM (quetiapine fumarate)
In September 2006, AstraZeneca received a subpoena from the California Attorney
General's Office seeking information about the marketing and sale of SeroquelTM
in California and its status on the state's formulary. In the same month,
AstraZeneca received a subpoena from the Alaska Attorney General's Office in an
unrelated investigation. The subpoena seeks information relating to the safety
and efficacy of SeroquelTM, as well as marketing practices relating to Seroquel
TM. AstraZeneca is in the initial stages of responding to these requests for
information.
ZestrilTM (lisinopril)
As previously disclosed, in April 2006 the Federal Court of Canada ruled in
favour of AstraZeneca and Merck & Co., Inc. in the patent infringement case
brought against Apotex, Inc. alleging infringement of Merck's lisinopril patent
in Canada. In October 2006, the Federal Court of Appeal in Canada upheld the
lower court's decision and dismissed Apotex's appeal.
US Securities and Exchange Commission enquiry
AstraZeneca has received an informal enquiry from the US Securities and Exchange
Commission seeking information about payments made to doctors and government
officials in relation to AstraZeneca's businesses in certain countries outside
the US. AstraZeneca is cooperating fully with the SEC.
General
With respect to each of the legal proceedings described above, we are unable to
make estimates of the loss or range of losses at this stage. We also do not
believe that disclosure of the amount sought by plaintiffs, if that is known,
would be meaningful with respect to those legal proceedings.
Arrangements with Merck
As described in more detail in the Annual Report and Form 20-F Information 2005,
AstraZeneca has significant arrangements with Merck & Co., Inc. relating to
certain of our products and development compounds. These arrangements include
exit provisions from 2008 onwards and we regularly monitor the value of the
benefits we expect to receive.
The exit provisions are subject to a minimum overall net payment of $3.3 billion
and will offer AstraZeneca unencumbered discretion in its operations in the US
market (except in respect of PrilosecTM and NexiumTM) without the restrictions
of various contractual obligations that are currently imposed as a result of
Merck's interests, together with relief from contingent payment obligations. The
projected value of the benefits to be obtained in 2008 depends on a number of
factors, including the future contributions from products that have already been
launched, those that are due to be launched in the US and those that are in
development, together with the further value that AstraZeneca can extract from
greater freedom to operate in the US.
4 NINE MONTHS TERRITORIAL SALES ANALYSIS
% Growth
9 Months 9 Months Constant
2006 2005 Currency
$m $m Actual
US 9,059 7,864 15 15
Canada 768 719 7 (1)
North America 9,827 8,583 14 13
France 1,219 1,265 (4) (1)
UK 613 561 9 12
Germany 864 917 (6) (3)
Italy 954 878 9 13
Sweden 228 232 (2) 3
Europe others 2,667 2,521 6 9
Total Europe 6,545 6,374 3 7
Japan 1,061 1,103 (4) 4
China 241 196 23 20
Rest of World 1,647 1,408 17 17
Total 19,321 17,664 9 11
5 THIRD QUARTER TERRITORIAL SALES ANALYSIS
% Growth
3rd 3rd
Quarter Quarter
2006 2005 Constant
$m $m Actual Currency
US 3,100 2,621 18 18
Canada 255 231 10 1
North America 3,355 2,852 18 17
France 385 391 (2) (7)
UK 213 181 18 14
Germany 284 296 (4) (8)
Italy 294 269 9 5
Sweden 72 70 3 (3)
Europe others 870 805 8 4
Total Europe 2,118 2,012 5 1
Japan 370 367 1 7
China 85 61 39 36
Rest of World 588 497 18 18
Total 6,516 5,789 13 11
6 NINE MONTHS PRODUCT SALES ANALYSIS
World US
Constant
9 Months 9 Months Actual Currency 9 Months Actual
2006 2005 Growth Growth 2006 Growth
$m $m % % $m %
Gastrointestinal:
Nexium 3,752 3,386 11 12 2,535 11
Losec/Prilosec 1,024 1,241 (17) (15) 156 (18)
Others 54 51 6 8 14 75
Total Gastrointestinal 4,830 4,678 3 4 2,705 9
Cardiovascular:
Seloken/Toprol-XL 1,407 1,280 10 10 1,105 17
Crestor 1,403 915 53 53 792 50
Atacand 809 727 11 12 192 7
Tenormin 238 262 (9) (6) 19 12
Zestril 229 248 (8) (6) 21 -
Plendil 210 287 (27) (26) 20 (74)
Others 213 235 (9) (7) 2 (33)
Total Cardiovascular 4,509 3,954 14 15 2,151 23
Respiratory:
Pulmicort 892 824 8 9 564 20
Symbicort 861 742 16 19 - -
Rhinocort 270 295 (8) (8) 189 (12)
Oxis 65 69 (6) (5) - -
Accolate 59 55 7 7 42 20
Others 105 115 (9) (6) - -
Total Respiratory 2,252 2,100 7 9 795 11
Oncology:
Arimidex 1,096 856 28 30 440 28
Casodex 879 840 5 8 213 19
Zoladex 736 752 (2) 1 80 (15)
Iressa 174 201 (13) (10) 12 (76)
Faslodex 138 101 37 38 75 12
Nolvadex 66 86 (23) (18) 2 (33)
Others 16 8 - - 8 -
Total Oncology 3,105 2,844 9 12 830 13
Neuroscience:
Seroquel 2,504 2,006 25 26 1,823 26
Local anaesthetics 396 380 4 7 65 35
Zomig 295 258 14 16 127 55
Diprivan 225 281 (20) (19) 63 (44)
Others 44 50 (12) (10) 13 -
Total Neuroscience 3,464 2,975 16 17 2,091 23
Infection and Other:
Merrem 437 375 17 18 84 38
Other Products 190 262 (27) (25) 97 (37)
Total Infection and Other 627 637 (2) (1) 181 (16)
Aptium Oncology 276 247 12 12 276 12
Astra Tech 258 229 13 16 30 43
Total 19,321 17,664 9 11 9,059 15
7 THIRD QUARTER PRODUCT SALES ANALYSIS
World US
3rd 3rd Constant 3rd
Quarter Quarter Actual Currency Quarter Actual
2006 2005 Growth Growth 2006 Growth
$m $m % % $m %
Gastrointestinal:
Nexium 1,280 1,127 14 13 879 15
Losec/Prilosec 324 376 (14) (15) 56 (5)
Others 21 15 40 40 9 -
Total Gastrointestinal 1,625 1,518 7 6 944 15
Cardiovascular:
Seloken/Toprol-XL 473 437 8 7 373 12
Crestor 536 325 65 62 301 59
Atacand 279 238 17 13 70 23
Tenormin 77 87 (11) (11) 6 (14)
Zestril 76 83 (8) (10) 8 -
Plendil 68 82 (17) (18) 9 (44)
Others 70 75 (7) (11) - (100)
Total Cardiovascular 1,579 1,327 19 17 767 27
Respiratory:
Pulmicort 263 234 12 11 165 23
Symbicort 276 240 15 11 - -
Rhinocort 83 91 (9) (9) 58 (12)
Oxis 21 23 (9) (13) - -
Accolate 20 14 43 43 15 88
Others 33 34 (3) (3) - -
Total Respiratory 696 636 9 7 238 14
Oncology:
Arimidex 382 303 26 24 156 28
Casodex 299 276 8 7 73 20
Zoladex 255 258 (1) (2) 28 (15)
Iressa 62 61 2 5 4 (67)
Faslodex 47 37 27 24 24 4
Nolvadex 21 26 (19) (15) - -
Others 10 2 - - 8 -
Total Oncology 1,076 963 12 11 293 17
Neuroscience:
Seroquel 848 706 20 19 613 19
Local anaesthetics 124 118 5 3 16 (6)
Zomig 99 86 15 13 41 52
Diprivan 64 76 (16) (17) 12 (54)
Others 15 15 - - 5 67
Total Neuroscience 1,150 1,001 15 14 687 16
Infection and Other:
Merrem 153 117 31 28 33 154
Other Products 57 73 (22) (26) 32 (24)
Total Infection and Other 210 190 11 7 65 18
Aptium Oncology 95 82 16 16 95 16
Astra Tech 85 72 18 14 11 57
Total 6,516 5,789 13 11 3,100 18
Shareholder Information
ANNOUNCEMENTS AND MEETINGS
Announcement of fourth quarter and full year 2006 results 1 February 2007
Announcement of first quarter 2007 results 26 April 2007
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 first interim dividend paid on 18 September 2006 (in the
UK, Sweden and the US) was 11 August 2006. Ordinary shares traded ex-dividend on
the London and Stockholm Stock Exchanges from 9 August 2006. ADRs traded
ex-dividend on the New York Stock Exchange from the same date.
The record date for the second interim dividend for 2006 payable on 19 March
2007 (in the UK, Sweden and the US) will be 9 February 2007. Ordinary shares
will trade ex-dividend on the London and Stockholm Stock Exchanges from 7
February 2007. ADRs will trade 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 Losec MUPS Merrem Nexium Nolvadex Oxis Plendil Prilosec
Pulmicort Pulmicort Respules Rhinocort Rhinocort Aqua Seloken Seroquel
Seroquel SR Symbicort Symbicort SMART Tenormin Toprol-XL Zestril Zoladex
Zomig
ADDRESSES FOR CORRESPONDENCE
Registrar and Depositary Registered Office Swedish Securities
Registration Centre
Transfer Office for ADRs
The AstraZeneca Registrar JPMorgan Chase Bank 15 Stanhope Gate VPC AB
Lloyds TSB Registrars JPMorgan Service Center London PO Box 7822
The Causeway PO Box 3408 W1K 1LN SE-103 97 Stockholm
Worthing South Hackensack UK Sweden
West Sussex NJ 07606-3408
BN99 6DA US
UK Tel: +44 (0)20 7304 5000 Tel: +46 (0)8 402 9000
Tel (freephone in UK): Tel (toll free in US):
0800 389 1580 888 697 8018
Tel (outside UK): Tel: +1 (201) 680 6630
+44 (0)121 415 7033
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 control, include, among other things: the loss or expiration of
patents, marketing exclusivity or trade marks; exchange rate fluctuations; the
risk that R&D will not yield new products that achieve commercial success; 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 delay to new product
launches; the difficulties of obtaining and maintaining governmental approvals
for products; the risk of failure to observe ongoing regulatory oversight; the
risk that new products do not perform as we expect; and the risk of
environmental liabilities.
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 31st May 2024
COMPANIES COVERED:
Latest directors dealings
- 2 days ago FDM Group (Holdings)
- 2 days ago Neo Energy Metals
- 2 days ago DCC (CDI)
- 2 days ago 3i Group
- 2 days ago 3i Group