Interim Results - Part 2 of 2

AstraZeneca PLC 26 July 2001 PART 2 Consolidated Profit & Loss Account For Continuing Operations 2001 2000 For the six months ended 30 June $m $m Sales 8,090 7,863 Cost of sales (2,186) (2,084) Distribution costs (60) (120) Research and development (1,341) (1,210) Selling, general and administrative expenses (2,660) (2,474) Other operating income 208 71 Operating profit before exceptional items 2,051 2,046 Exceptional items charged to operating profit (81) (179) Operating profit 1,970 1,867 Share of joint ventures' and associates' operating - 19 profits Profit on sale of fixed assets 10 - Net interest and dividend income 78 34 Profit on ordinary activities before taxation 2,058 1,920 Profit before taxation before exceptional items 2,129 2,099 Exceptional items charged to profit before taxation (71) (179) Taxation (565) (575) Profit on ordinary activities after taxation 1,493 1,345 Attributable to minorities (5) (5) Net profit for the period 1,488 1,340 Dividends to Shareholders (405) (406) Profit retained for the period 1,083 934 Earnings per Ordinary Share before exceptional items $0.87 $0.84 Earnings per Ordinary Share $0.84 $0.75 Diluted earnings per Ordinary Share $0.84 $0.75 Weighted average number of Ordinary Shares in issue 1,764 1,771 (millions) Diluted average number of Ordinary Shares in issue 1,766 1,773 (millions) The interim financial statements on pages 9 to 19 were approved by the Board on 26 July 2001. Consolidated Profit & Loss Account For Continuing Operations 2001 2000 For the quarter ended 30 June $m $m Sales 4,099 3,971 Cost of sales (1,112) (1,012) Distribution costs (30) (57) Research and development (669) (613) Selling, general and administrative expenses (1,339) (1,256) Other operating income 47 37 Operating profit before exceptional items 996 1,070 Exceptional items charged to operating profit (56) (96) Operating profit 940 974 Share of joint ventures' and associates' operating - (3) profits Profit on sale of fixed assets - - Net interest and dividend income 23 15 Profit on ordinary activities before taxation 963 986 Profit before taxation before exceptional items 1,019 1,082 Exceptional items charged to profit before taxation (56) (96) Taxation (255) (305) Profit on ordinary activities after taxation 708 681 Attributable to minorities (2) (3) Net profit for the period 706 678 Dividends to Shareholders (405) (406) Profit retained for the period 301 272 Earnings per Ordinary Share before exceptional items $0.42 $0.43 Earnings per Ordinary Share $0.40 $0.37 Diluted earnings per Ordinary Share $0.40 $0.37 Weighted average number of Ordinary Shares in issue 1,762 1,769 (millions) Diluted average number of Ordinary Shares in issue 1,764 1,771 (millions) Consolidated Balance Sheet 30 June 30 June 2001 2000 $m $m Fixed assets Tangible fixed assets 4,925 6,015 Goodwill and intangible assets 2,661 3,503 Fixed asset investments 16 187 7,602 9,705 Current assets Stocks 2,063 2,370 Debtors 3,932 4,930 Cash and short-term investments 4,233 2,953 10,228 10,253 Total assets 17,830 19,958 Creditors due within one year Short-term borrowings and current instalments of (263) (444) loans Other creditors (5,980) (6,356) (6,243) (6,800) Net current assets 3,985 3,453 Total assets less current liabilities 11,587 13,158 Creditors due after more than one year Loans (638) (749) Other creditors (258) (451) Provisions for liabilities and charges (1,101) (1,278) (1,997) (2,478) Net assets 9,590 10,680 Capital and reserves Shareholders' funds - equity interests 9,560 10,636 Minority equity interests 30 44 Shareholders' funds and minority interests 9,590 10,680 Statement of Total Recognised Gains and Losses 2001 2000 For the six months ended 30 June $m $m Net profit for the period - from continuing operations 1,488 1,340 - from discontinued operations - 208 Exchange adjustments on net assets (796) (432) Translation differences on foreign currency borrowings 43 (5) Tax on translation differences on foreign currency (5) 1 borrowings Other movements 3 (6) Total recognised gains and losses relating to the 733 1,106 period Consolidated Cash Flow Statement 2001 2000 For the six months ended 30 June $m $m Cash flow from operating activities Operating profit before exceptional items: - from continuing operations 2,051 2,046 - from discontinued operations - 343 Depreciation 296 354 Amortisation 128 159 Increase in working capital (254) (655) Other non-cash movements 6 32 Net cash inflow from operating activities before exceptional items 2,227 2,279 Outflow related to exceptional items (181) (445) Net cash inflow from operating activities 2,046 1,834 Returns on investments and servicing of finance 71 27 Tax paid (522) (419) Capital expenditure and financial investment Net cash expenditure on fixed assets (628) (636) New fixed asset investments (5) (3) (633) (639) Acquisitions and disposals (45) - Equity dividends paid to Shareholders (830) (820) Net cash inflow/(outflow) before management of liquid 87 (17) resources and financing Management of liquid resources Movement in short-term investments and fixed deposits (451) 667 (net) Financing (169) (274) (Decrease)/increase in cash in the period (533) 376 Net cash funds Net cash inflow/(outflow) before management of liquid resources and financing 87 (17) AstraZeneca PLC Ordinary Shares Issued for cash 55 5 Repurchased for cash (344) (353) Outflow of net cash funds in the period (202) (365) Independent Review Report to AstraZeneca PLC by KPMG Audit Plc Introduction We have been instructed by the Company to review the financial information for the six month period ended 30 June 2001 set out on pages 9 and 11 to 19 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the Directors. The Listing Rules of the Financial Services Authority require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where they are to be changed in the next annual accounts, in which case any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999 /4 (Review of Interim Financial Information) issued by the Auditing Practices Board. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2001. KPMG Audit Plc Chartered Accountants London 26 July 2001 Notes to the Interim Financial Statements 1 BASIS OF PREPARATION AND ACCOUNTING POLICIES The unaudited results for the six months ended 30 June 2001 have been prepared in accordance with UK generally accepted accounting principles. The accounting policies applied are those set out in AstraZeneca PLC's 2000 Annual Report and Form 20-F. In 2001, the continued standardisation of accounting treatments across AstraZeneca has led certain subsidiaries to classify as cost of sales some elements of expense recorded as distribution costs in previous periods. The effect of this change in the current half year period is to reclassify approximately $60m of costs. Previous periods have not been restated. Continuing operations comprises the ongoing business of AstraZeneca and the comparative Profit and Loss Account figures for 2000 exclude the results of the Agrochemicals business which was demerged on 13 November 2000. The full comparative Profit and Loss Account for first half 2000 is detailed in note 3 below. The statements are unaudited but have been reviewed by the auditors and their report is set out above. The statements do not comprise the statutory accounts of the group. Statutory accounts for AstraZeneca PLC for the year ended 31 December 2000 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 JOINT VENTURES AND ASSOCIATES The group's share of joint ventures' sales for the half year to 30 June 2001 amounted to $163m and $158m for the comparative period. Share of joint ventures' operating profits for the half year to 30 June 2001 amounted to nil, and for the comparative period $19m. 3 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 JUNE 2000 Continuing Discontinued Total Operations Operations $m $m $m Sales 7,863 1,681 9,544 Cost of sales (2,084) (913) (2,997) Distribution costs (120) (54) (174) Research and development (1,210) (132) (1,342) Selling, general and (2,474) (260) (2,734) administrative expenses Other operating income 71 21 92 Operating profit before 2,046 343 2,389 exceptional items Exceptional items charged to (179) - (179) operating profit Operating profit 1,867 343 2,210 Share of joint ventures' and 19 - 19 associates' operating profits Net interest 34 - 34 Profit on ordinary activities 1,920 343 2,263 before taxation Taxation (575) (133) (708) Profit on ordinary activities 1,345 210 1,555 after taxation Attributable to minorities (5) (2) (7) Net profit for the period 1,340 208 1,548 Dividends to Shareholders (406) - (406) Profit retained for the period 934 208 1,142 Earnings per Ordinary Share $0.84 $0.12 $0.96 before exceptional items Earnings per Ordinary Share $0.75 $0.12 $0.87 Diluted earnings per Ordinary $0.75 $0.12 $0.87 Share 4 ANALYSIS OF EXCEPTIONAL ITEMS CHARGED TO OPERATING PROFIT The following are the components of the exceptional charges to operating profits from continuing operations which relate to the integration and synergy programme commenced after the AstraZeneca merger: 2001 2000 For the six months ended 30 June $m $m Cost of sales 5 3 Research and development 22 26 Selling, general and administrative expenses 54 150 81 179 5 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2001 2000 For the six months ended 30 June $m $m Shareholders' funds at beginning of period 9,521 10,302 Net profit for the period - from continuing operations 1,488 1,340 - from discontinued operations - 208 Dividends to Shareholders (405) (406) 1,083 1,142 Issue of AstraZeneca PLC Ordinary Shares 55 5 Repurchase of AstraZeneca PLC Ordinary Shares (344) (353) Foreign currency adjustment (758) (436) Minority interest buy out - (18) Other movements 3 (6) Net addition to Shareholders' funds 39 334 Shareholders' funds at end of period 9,560 10,636 6 NET CASH FUNDS The table below provides an analysis of net cash funds and a reconciliation of net cash flow to movement in net cash funds. At 31 Dec Cash Other Exchange At 30 June 2000 flow Non-cash Movements 2001 $m $m $m $m $m Loans due after (631) (8) - 1 (638) 1 year Current (88) (111) - 1 (198) instalments of loans Total loans (719) (119) - 2 (836) Short-term 3,429 451 (1) (69) 3,810 investments Cash 1,021 (582) - (16) 423 Overdrafts (113) 49 - 13 (51) Short-term borrowings, excluding (13) (1) - - (14) overdrafts 4,324 (83) (1) (72) 4,168 Net cash funds 3,605 (202) (1) (70) 3,332 Issue of AstraZeneca PLC (55) Ordinary Shares Repurchase of AstraZeneca PLC 344 Ordinary Shares Net cash inflow before management of liquid resources and financing 87 7 HALF YEAR PRODUCT SALES ANALYSIS World US 1st 1st Constant 1st Half Half Actual Currency Half Actual 2001 2000 Growth Growth 2001 Growth $m $m % % $m % Gastrointestinal: Losec 2,866 2,967 (3) - 1,876 (4) Nexium 127 - n/m n/m 80 n/m Others 21 22 (5) 4 - - Total 3,014 2,989 1 4 1,956 - Gastrointestinal Cardiovascular: Zestril 644 661 (3) - 412 1 Seloken 350 261 34 39 209 73 Plendil 212 233 (9) (3) 77 (5) Tenormin 213 253 (16) (9) 35 (29) Atacand 196 124 58 67 76 69 Imdur 45 49 (8) - 6 (14) Others 175 203 (14) (7) 27 (27) Total 1,835 1,784 3 8 842 13 Cardiovascular Respiratory: Pulmicort 409 353 16 23 142 141 Rhinocort 130 114 14 18 81 29 Accolate 95 114 (17) (15) 72 (27) Oxis 65 56 16 27 - - Bricanyl 55 66 (17) (9) - - Symbicort 14 - n/m n/m - - Others 26 26 - 15 - - Total Respiratory 794 729 9 15 295 34 Oncology: Zoladex 344 364 (5) 2 102 - Nolvadex 286 275 4 7 210 9 Casodex 244 220 11 18 97 (11) Arimidex 92 82 12 19 32 (3) Others 15 15 - 7 - - Total Oncology 981 956 3 9 441 1 CNS: Seroquel 357 204 75 77 301 61 Zomig 154 132 17 21 100 15 Other CNS 3 18 (83) (83) 3 (63) Total CNS 514 354 45 48 404 43 7 HALF YEAR PRODUCT SALES ANALYSIS (CONTINUED) World US 1st 1st Constant 1st Half Half Actual Currency Half Actual 2001 2000 Growth Growth 2001 Growth $m $m % % $m % Pain, Infection and Other Pharma: Diprivan 215 284 (24) (19) 87 (36) Merrem 106 78 36 45 22 340 Xylocaine 103 117 (12) (5) 26 (10) Marcaine 41 45 (9) (2) 12 (14) Naropin 29 27 7 14 5 (17) Other 248 295 (16) (9) 71 (16) Pharma Products Total Pain, Infection 742 846 (12) (6) 223 (19) and Other Pharma Salick 95 90 6 6 95 6 Health Care Astra 62 58 7 17 3 50 Tech Marlow 53 47 13 24 - - Foods Other - 10 - - - - 210 205 2 7 98 7 Total 8,090 7,863 3 8 4,259 6 n/m not meaningful 8 SECOND QUARTER PRODUCT SALES ANALYSIS World US 2nd 2nd Constant 2nd Quarter Quarter Actual Currency Quarter Actual 2001 2000 Growth Growth 2001 Growth $m $m % % $m % Gastrointestinal: Losec 1,371 1,379 (1) 3 873 - Nexium 46 - n/m n/m 17 n/m Others 9 11 (18) - - - Total 1,426 1,390 3 7 890 2 Gastrointestinal Cardiovascular: Zestril 350 385 (9) (6) 230 (8) Seloken 199 155 28 32 126 52 Plendil 106 118 (10) (4) 35 (13) Tenormin 115 134 (14) (7) 22 (12) Atacand 113 68 66 73 49 96 Imdur 24 26 (8) - 4 - Others 93 104 (11) (5) 13 (24) Total 1,000 990 1 6 479 8 Cardiovascular 8 SECOND QUARTER PRODUCT SALES ANALYSIS (CONTINUED) World US 2nd 2nd Constant 2nd Quarter Quarter Actual Currency Quarter Actual 2001 2000 Growth Growth 2001 Growth $m $m % % $m % Respiratory: Pulmicort 209 179 17 24 79 114 Rhinocort 74 73 1 4 47 2 Accolate 46 59 (22) (20) 36 (28) Oxis 33 29 14 24 - - Bricanyl 27 32 (16) (10) - - Symbicort 11 - n/m n/m - - Others 13 12 8 25 - - Total 413 384 8 14 162 22 Respiratory Oncology: Zoladex 184 197 (7) - 53 (2) Nolvadex 147 136 8 12 105 17 Casodex 129 105 23 32 48 12 Arimidex 49 45 9 16 16 (16) Others 8 8 - 13 - - Total 517 491 5 12 222 8 Oncology CNS: Seroquel 168 122 38 40 138 23 Zomig 88 67 31 35 60 40 Other CNS 1 10 (90) (90) 1 (80) Total CNS 257 199 29 32 199 24 Pain, Infection and Other Pharma: Diprivan 108 120 (10) (5) 44 - Merrem 57 42 36 46 13 160 Xylocaine 56 63 (11) (3) 15 (6) Marcaine 22 24 (8) - 7 (13) Naropin 14 14 - 7 2 (33) Other Pharma 121 153 (21) (11) 36 (25) Products Total Pain, Infection378 416 (9) (1) 117 (6) and Other Pharma Salick 50 45 11 11 50 11 Health Care Astra Tech 32 30 7 17 1 - Marlow Foods 26 22 18 27 - - Other - 4 n/m n/m - - 108 101 7 12 51 11 Total 4,099 3,971 3 8 2,120 7 n/m not meaningful 9 HALF YEAR TERRITORIAL SALES ANALYSIS % Growth 1st 1st Half Half 2001 2000 Constant $m $m Actual Currency USA 4,259 4,010 6 6 Japan 389 374 4 18 France 482 450 7 18 Germany 348 353 (1) 8 Italy 337 319 6 16 Sweden 142 172 (17) (5) UK 370 391 (5) 3 Rest of World 1,763 1,794 (2) 7 Total 8,090 7,863 3 8 10 SECOND QUARTER TERRITORIAL SALES ANALYSIS % Growth 2nd 2nd Quarter Quarter 2001 2000 Constant $m $m Actual Currency USA 2,120 1,989 7 7 Japan 211 218 (3) 12 France 244 219 11 22 Germany 180 178 1 11 Italy 187 166 13 21 Sweden 75 85 (12) 4 UK 198 207 (4) 5 Rest of World 884 909 (3) 6 Total 4,099 3,971 3 8 Information for US Investors RECONCILIATION TO UNITED STATES ACCOUNTING PRINCIPLES The profit and loss accounts and balance sheet set out on pages 9, 11 and 14 are prepared in accordance with generally accepted accounting principles in the United Kingdom (UK GAAP) which differ in certain material respects from those generally accepted in the United States (US GAAP). The differences as they apply to AstraZeneca PLC are explained in the 2000 Annual Report and Form 20-F. The approximate effects on income and shareholders' equity of the GAAP differences are shown below. 1st 1st Half Half Income attributable to Shareholders 2001 2000 $m $m Net income for the period under UK GAAP from 1,488 1,340 continuing operations Adjustments to conform to US GAAP Purchase accounting adjustments, (including goodwill & intangibles): - deemed acquisition of Astra (goodwill amortisation (767) (878) and other acquisition adjustments) - others - (6) Capitalisation less amortisation of interest 19 19 Capitalisation less amortisation of software costs 10 73 Deferred taxation 123 5 Pension expense (22) (17) Post-retirement benefits/plan amendment 2 2 Restructuring costs (22) (25) Unrealised gains on foreign exchange and others (21) 5 Net income in accordance with US GAAP from continuing operations 810 518 Net income in accordance with US GAAP from discontinued operations - 185 Net income in accordance with US GAAP 810 703 Net income / (loss) per Ordinary Share under US GAAP from continuing operations - basic and diluted $0.46 $0.29 Net income / (loss) per Ordinary Share under US GAAP from discontinued operations - basic and diluted - $0.11 RECONCILIATION TO UNITED STATES ACCOUNTING PRINCIPLES (CONTINUED) 30 30 June June Shareholders' equity 2001 2000 $m $m Shareholders' equity under UK GAAP 9,560 10,636 Adjustments to conform to US GAAP Purchase accounting adjustments (including goodwill and intangibles): - deemed acquisition of Astra - goodwill 11,409 13,374 - tangible and intangible fixed assets 8,404 10,244 - others 31 481 Capitalisation of interest 154 164 Deferred taxation - on fair value of Astra (2,390) (2,904) - others (228) (388) Dividend 405 406 Pension expense (151) (191) Post-retirement benefits / plan amendment (30) (29) Software costs capitalised 130 105 Restructuring costs - 94 Others 52 88 Shareholders' equity in accordance with US GAAP 27,346 32,080 Shareholder Information ANNOUNCEMENTS AND MEETINGS Announcement of third quarter and nine month results 24 October 2001 Annual Business Review - London 3 December 2001 - New York 5 December 2001 Announcement of 2001 Full Year Results 31 January 2002 DIVIDENDS The record date for the first interim dividend payable on 5 October 2001 (in the UK, Sweden and the US) is 24 August 2001. Ordinary Shares will trade ex-dividend on the London and Stockholm Stock Exchanges from 22 August 2001. 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 end of July and paid in October. Second interim Announced in January and paid in April. TRADE MARKS The following brand names used in this interim report are trade marks of the AstraZeneca group of companies: Accolate Arimidex Astra Tech Atacand Atacand HCT Atacand Plus Bricanyl Casodex Crestor Diprivan Exanta Faslodex Imdur Iressa Losec Marcaine Merrem Naropin Nexium Nolvadex Oxis Plendil Prilosec Pulmicort Pulmicort Respules Rhinocort Rhinocort Aqua Seloken Seroquel Symbicort Tenormin Toprol-XL Viozan Zestril Zoladex Zomig Zomig Rapimelt Zomig ZMT ADDRESSES FOR CORRESPONDENCE Registrar and Depositary Transfer Office for ADRs The AstraZeneca Morgan Guaranty Registrar Trust Lloyds TSB Company of New Registrars York The Causeway ADR Service Center Worthing PO Box 842006 West Sussex Boston, MA 02284-2006 BN99 6DA Tel: (0870) 600 3956 Tel: (781) 575 4328 Registered Office Swedish Securities Register Centre 15 Stanhope Gate VPC AB London Box 7822 W1K 1LN S-103 97 Stockholm Sweden Tel: (020) 7304 5000 Tel: (8) 402 9000 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS In order to utilise the 'Safe Harbor' provisions of the United States Private Securities Litigation Reform Act of 1995, AstraZeneca is providing the following cautionary statement. This Interim Report contains forward-looking statements with respect to the financial condition, results of operations and businesses of AstraZeneca. By their nature, forward-looking statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from that expressed or implied by these forward-looking statements. These factors include, among other things, exchange rate fluctuations, the risk that research and development will not yield new products that achieve commercial success, the impact of competition, price controls and price reductions, the risk of loss or expiration of patents or trade marks, difficulties of obtaining and maintaining governmental approvals for products, the risk of substantial product liability claims, exposure to environmental liability and the risks related to the difficulty of completing the integration of Astra's and Zeneca's large and complex businesses on a timely basis and realising synergies.

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