Interim Results - Part 3
ASTRAZENECA PLC
3 August 1999
Part 3
Notes to the Interim Financial Statements
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
The interim financial statements have been prepared using the merger
method of accounting in relation to the merger of Zeneca Group PLC and
Astra AB which became effective on 5 April 1999. Under merger
accounting, the results and cash flows of Zeneca Group PLC and Astra AB
are combined from the beginning of the financial period in which the
merger occurred and their assets and liabilities combined at the amounts
at which they were previously recorded after adjusting to achieve
consistency of accounting policies. Profit and loss account, balance
sheet and cash flow comparatives are restated on the combined basis.
Following completion of the merger, as the US dollar is considered to be
the most significant currency exposure, these and all subsequent
financial statements will be presented in US dollars. Translations of
key information into sterling and Swedish Kronor are provided on page
24. AstraZeneca PLC's share capital has been redenominated from
sterling into US dollars.
The unaudited results for the six months ended 30 June 1999 have been
prepared in accordance with UK generally accepted accounting principles.
The accounting policies applied are those set out in AstraZeneca PLC's
(formerly Zeneca Group PLC) 1998 Annual Report and Form 20-F except that
during the period under review AstraZeneca adopted Financial Reporting
Standard No. 12 'Provisions, Contingent Liabilities and Contingent
Assets' (FRS 12). The adoption of FRS 12 had no impact on the Group's
net assets at 1 January 1999.
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 Zeneca Group
PLC for the year ended 31 December 1998 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 BASIS OF PRO FORMA FIGURES
In addition to merging the historical results of Astra and Zeneca under
UK GAAP, as required for statutory reporting, the unaudited pro forma
profit and loss figures for 1998 and 1999 include two further
adjustments to the statutory figures to illustrate the effect on the
sales and profits as if the Astra Merck Restructuring and the merger
related payments to Merck had occurred at the beginning of 1998 (rather
than July 1998 and April 1999 respectively).
The pro forma figures incorporate sales of USD1,715m for the first six
months of 1998 related to the Astra Merck joint venture which are
excluded from the statutory consolidation. Changes in the cost base
which arise from the Astra Merck restructuring have also been back dated
six months to 1 January 1998. The net effect of these pro forma
adjustments is to reduce first half 1998 reported profits by USD55m,
before tax relief of USD23m.
A pro forma amortisation cost of USD12m per quarter has also been
provided from 1 January 1998 to 5 April 1999, and notional interest cost
of USD21m per quarter on the payments due to Merck on completion of the
Merger. These charges are offset by tax relief of USD6m per quarter.
Further details on the basis of the pro forma adjustments are included
in the Merger Document and AstraZeneca's Circular to Shareholders
relating to the Merger, both dated 21 January 1999, and in AstraZeneca's
Registration Statement on Form F-4 filed with the US Securities and
Exchange Commission.
3 JOINT VENTURES AND ASSOCIATES
The Group's share of joint ventures' sales for the half year to 30 June
1999 amounted to USD168m and USD1,871m for the comparative period.
Share of joint ventures' and associates' operating profits for the half
year to 30 June 1999 amounted to USD22m and USD1m respectively, and for
the comparative period USD560m and USD1m, respectively. Prior to 1 July
1998, the operations of Astra Merck, Inc. were accounted for as a joint
venture.
4 EXCEPTIONAL ITEMS
1st 1st
Half Half
1999 1998
USDm USDm
-------------------------------- ----- -----
Integration and synergy costs (130) -
Astra Pharmaceuticals L.P.
restructuring costs (12) -
-------------------------------- ----- -----
Exceptional items included in
operating profits (142) -
-------------------------------- ----- -----
Gain on disposal of Specialties
business (after charging
USD406m of goodwill
previously written off to
reserves) 237 -
Loss on closure of
organophosphate intermediates
business - (46)
-------------------------------- ----- -----
Profit less losses on sale and
closure of operations 237 (46)
-------------------------------- ----- -----
Merck 'Trigger Event' payment (713) -
Other merger costs (204) -
-------------------------------- ----- -----
Merger costs (917) -
-------------------------------- ----- -----
Total exceptional items before
taxation (822) (46)
Net taxation credit 141 12
-------------------------------- ----- -----
(681) (34)
-------------------------------- ----- -----
5 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
30 June 30 June
1999 1998
USDm USDm
-------------------------------- ----- -----
Shareholders' funds at beginning
of period 10,929 9,552
-------------------------------- ----- -----
Net profit for the period 832 1,440
Dividends (408) (220)
-------------------------------- ----- -----
424 1,220
Issue of AstraZeneca PLC
Ordinary Shares 11 6
Foreign currency adjustments (496) 2
Goodwill realised 420 -
Minority interest buy out (137) -
Other movements (6) 2
-------------------------------- ----- -----
Net addition to Shareholders'
funds 216 1,230
-------------------------------- ----- -----
Shareholders' funds at end of
period 11,145 10,782
-------------------------------- ----- -----
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 Acquisitions Exchange At 30 June
1998 flow and disposals movements 1999
USDm USDm USDm USDm USDm
----------------- ----- ----- ----- ----- -----
Loans due after 1
year (761) (4) - 16 (749)
Current
instalments of
loans (30) 1 - 2 (27)
Finance leases (20) 4 12 1 (3)
----------------- ----- ----- ----- ----- -----
Total loans and
lease finance (811) 1 12 19 (779)
----------------- ----- ----- ----- ----- -----
Short-term
investments 274 1,011 - (36) 1,249
Cash 3,138 (983) - (140) 2,015
Overdrafts (240) (5) - 13 (232)
Short-term
borrowings,
excluding
overdrafts (107) (311) - (1) (419)
----------------- ----- ----- ----- ----- -----
3,065 (288) - (164) 2,613
----------------- ----- ----- ----- ----- -----
Net cash funds 2,254 (287) 12 (145) 1,834
----------------- ----- ----- ----- ----- -----
Issue of shares (11)
Issue of shares
by subsidiaries
to minorities (3)
----------------- ----- ----- ----- ----- -----
Net cash outflow
before
management of
liquid
resources
and
financing (301)
----------------- ----- ----- ----- ----- -----
7 SEGMENT ANALYSIS
1st 1st 2nd 2nd 1st 1st
Quarter Quarter Quarter Quarter Half Half
1999 1998 1999 1998 1999 1998
USDm USDm USDm USDm USDm USDm
------------------ ----- ----- ----- ----- ----- -----
Geographical
analysis of
sales by
customer
location
United Kingdom 246 214 282 258 528 472
Continental Europe 1,500 1,253 1,410 1,258 2,910 2,511
The Americas 2,146 1,160 2,528 1,425 4,674 2,585
Asia, Africa and
Australasia 422 375 509 438 931 813
------------------ ----- ----- ----- ----- ----- -----
Continuing
Operations 4,314 3,002 4,729 3,379 9,043 6,381
------------------ ----- ----- ----- ----- ----- -----
Sales by class of
business
Healthcare 3,630 2,297 3,752 2,348 7,382 4,645
------------------------------------------------------------------------
Pharmaceuticals 3,570 2,246 3,694 2,297 7,264 4,543
Salick Health
Care 60 51 58 51 118 102
------------------------------------------------------------------------
Agrochemicals 663 684 949 1,009 1,612 1,693
Other trading 21 21 28 22 49 43
------------------ ----- ----- ----- ----- ----- -----
Continuing
operations 4,314 3,002 4,729 3,379 9,043 6,381
------------------ ----- ----- ----- ----- ----- -----
Operating profit/
(loss) before
exceptional
items
Healthcare 880 600 954 530 1,834 1,130
------------------------------------------------------------------------
Pharmaceuticals 883 600 955 533 1,838 1,133
Salick Health
Care (3) - (1) (3) (4) (3)
------------------------------------------------------------------------
Agrochemicals 71 83 212 253 283 336
Other trading (3) (8) (11) - (14) (8)
------------------ ----- ----- ----- ----- ----- -----
Continuing
operations 948 675 1,155 783 2,103 1,458
------------------ ----- ----- ----- ----- ----- -----
Operating profit/
(loss) before
exceptional
items as a
percentage
of sales % % % % % %
------------------ ----- ----- ----- ----- ----- -----
Healthcare 24.2 26.1 25.4 22.6 24.8 24.3
------------------------------------------------------------------------
Pharmaceuticals 24.7 26.7 25.9 23.2 25.3 24.9
Salick Health
Care (5.0) - (1.7) (5.9) (3.4) (2.9)
------------------------------------------------------------------------
Agrochemicals 10.7 12.1 22.3 25.1 17.6 19.8
------------------ ----- ----- ----- ----- ----- -----
Continuing
operations 22.0 22.5 24.4 23.2 23.3 22.8
------------------ ----- ----- ----- ----- ----- -----
8 PRODUCTS AND TERRITORIAL SEGMENT SALES ANALYSIS
1st 1st Pro Forma Pro Forma
Half Half % Growth % Growth
1999 1998 Constant
Pharmaceuticals USDm USDm Currency
-------------------------------- ----- ----- ----- -----
Product Analysis
Gastrointestinal:
Losec 2,848 834 +15 +15
Others 24 21 +14 +14
-------------------------------- ----- ----- ----- -----
Total Gastrointestinal 2,872 855 +15 +15
-------------------------------- ----- ----- ----- -----
Cardiovascular:
Zestril 602 511 +18 +18
Tenormin 247 245 +1 +1
Seloken 257 205 +25 +24
Plendil 216 122 +11 +10
Imdur 59 55 +7 +7
Ramace 35 31 +13 +13
Atacand 73 12 n/m* n/m
Others 181 161 +7 +6
-------------------------------- ----- ----- ----- -----
Total Cardiovascular 1,670 1,342 +17 +17
-------------------------------- ----- ----- ----- -----
Respiratory:
Pulmicort 370 338 +9 +9
Accolate 74 74 - -
Rhinocort 99 80 +24 +24
Bricanyl 73 78 -6 -6
Oxis 41 17 n/m n/m
Others 29 29 - +3
-------------------------------- ----- ----- ----- -----
Total Respiratory 686 616 +11 +11
-------------------------------- ----- ----- ----- -----
Oncology:
Zoladex 331 301 +10 +9
Nolvadex 287 264 +9 +8
Casodex 166 116 +43 +44
Arimidex 63 58 +9 +9
Tomudex 12 8 +50 +50
-------------------------------- ----- ----- ----- -----
Total Oncology 859 747 +15 +14
-------------------------------- ----- ----- ----- -----
Specialist/Hospital:
Diprivan 327 323 +1 +2
Xylocaine 128 116 +10 +7
Marcaine 42 40 +5 +5
Naropin 22 13 +69 +69
Zomig 86 32 n/m n/m
Seroquel 95 19 n/m n/m
Merrem 77 65 +18 +26
Other Products 345 327 +6 +7
Astra Tech 55 48 +15 +17
-------------------------------- ----- ----- ----- -----
Total Specialist/Hospital 1,177 983 +20 +21
-------------------------------- ----- ----- ----- -----
Total Pharmaceuticals 7,264 4,543 +16 +16
-------------------------------- ----- ----- ----- -----
* n/m = not meaningful
8 PRODUCTS AND TERRITORIAL SEGMENT SALES ANALYSIS (CONTINUED)
1st 1st Pro Forma Pro Forma
Half Half % Growth % Growth
1999 1998 Constant
Pharmaceuticals USDm USDm Currency
-------------------------------- ----- ----- ----- -----
Territorial Analysis
US 3,470 1,240 +17 +17
Japan 304 261 +16 +5
France 423 334 +27 +26
Germany 449 417 +8 +7
Italy 317 255 +24 +23
Sweden 184 178 +3 +7
UK 392 366 +7 +9
Rest of World 1,725 1,492 +16 +18
-------------------------------- ----- ----- ----- -----
7,264 4,543 +16 +16
-------------------------------- ----- ----- ----- -----
Pro Forma % growth has been calculated as if the Astra Merck
restructuring had occurred on 1 January 1998. Constant currency %
growth has been calculated excluding the effects arising from exchange
rate movements.
1st 1st
Half Half % Growth % Growth
1999 1998 Constant
Agrochemicals USDm USDm Currency
-------------------------------- ----- ----- ----- -----
Product Analysis
Herbicides:
Non-Selective 369 369 - -
Selective 490 606 -19 -19
-------------------------------- ----- ----- ----- -----
Total Herbicides 859 975 -12 -12
Insecticides 230 263 -13 -13
Fungicides 475 405 +17 +16
Others 48 50 -4 -8
-------------------------------- ----- ----- ----- -----
Total Agrochemicals 1,612 1,693 -5 -5
-------------------------------- ----- ----- ----- -----
Territorial Analysis
North America 576 679 -15 -15
Latin America 165 209 -21 -21
Europe 633 600 +6 +5
Asia, Africa, Australasia 238 205 +16 +14
-------------------------------- ----- ----- ----- -----
1,612 1,693 -5 -5
-------------------------------- ----- ----- ----- -----
Constant currency % growth has been calculated excluding the effects
arising from exchange rate movements.
8 PRODUCTS AND TERRITORIAL SEGMENT SALES ANALYSIS (CONTINUED)
1st 1st Pro Forma 2nd 2nd Pro Forma
Quarter Quarter % Growth Quarter Quarter % Growth
1999 1998 Constant 1999 1998 Constant
Pharmaceuticals USDm USDm Currency USDm USDm Currency
------------------ ----- ----- ----- ----- ----- -----
Product Analysis
Gastrointestinal:
Losec 1,414 404 +24 1,434 430 +9
Others 12 11 +9 12 10 +20
------------------ ----- ----- ----- ----- ----- -----
Total
Gastrointestinal 1,426 415 +24 1,446 440 +9
------------------ ----- ----- ----- ----- ----- -----
Cardiovascular:
Zestril 301 255 +17 301 256 +19
Tenormin 124 121 - 123 124 +1
Seloken 112 91 +21 145 114 +27
Plendil 108 59 +14 108 63 +6
Imdur 32 27 +19 27 28 -4
Ramace 18 15 +13 17 16 +12
Atacand 32 5 n/m 41 7 n/m
Others 88 79 +8 93 82 +5
------------------ ----- ----- ----- ----- ----- -----
Total
Cardiovascular 815 652 +16 855 690 +17
------------------ ----- ----- ----- ----- ----- -----
Respiratory:
Pulmicort 190 173 +8 180 165 +11
Accolate 28 33 -15 46 41 +12
Rhinocort 43 32 +31 56 48 +19
Bricanyl 38 37 - 35 41 -13
Oxis 20 7 n/m 21 10 n/m
Others 17 16 +6 12 13 -
------------------ ----- ----- ----- ----- ----- -----
Total Respiratory 336 298 +11 350 318 +12
------------------ ----- ----- ----- ----- ----- -----
Oncology:
Zoladex 165 150 +9 166 151 +10
Nolvadex 143 136 +4 144 128 +11
Casodex 91 66 +38 75 50 +52
Arimidex 27 35 -23 36 23 +57
Tomudex 7 3 +100 5 5 +20
------------------ ----- ----- ----- ----- ----- -----
Total Oncology 433 390 +10 426 357 +19
------------------ ----- ----- ----- ----- ----- -----
Specialist/
Hospital:
Diprivan 149 170 -13 178 153 +17
Xylocaine 61 56 +5 67 60 +10
Marcaine 20 19 +5 22 21 +5
Naropin 10 6 +67 12 7 +71
Zomig 39 12 n/m 47 20 n/m
Seroquel 47 7 n/m 48 12 n/m
Merrem 38 33 +18 39 32 +35
Other Products 169 164 +5 176 163 +8
Astra Tech 27 24 +9 28 24 +25
------------------ ----- ----- ----- ----- ----- -----
Total Specialist/
Hospital 560 491 +14 617 492 +27
------------------ ----- ----- ----- ----- ----- -----
Total
Pharmaceuticals 3,570 2,246 +17 3,694 2,297 +15
------------------ ----- ----- ----- ----- ----- -----
n/m = not meaningful
8 PRODUCTS AND TERRITORIAL SEGMENT SALES ANALYSIS (CONTINUED)
1st 1st Pro Forma 2nd 2nd Pro Forma
Quarter Quarter % Growth Quarter Quarter % Growth
1999 1998 Constant 1999 1998 Constant
Pharmaceuticals USDm USDm Currency USDm USDm Currency
---------------- ----- ----- ----- ----- ----- -----
Territorial
Analysis
US 1,679 649 +18 1,791 591 +16
Japan 127 111 +5 177 150 +6
France 211 160 +26 212 174 +25
Germany 249 208 +15 200 209 -2
Italy 160 126 +21 157 129 +25
Sweden 98 92 +9 86 86 +6
UK 193 174 +12 199 192 +7
Rest of World 853 726 +18 872 766 +17
---------------- ----- ----- ----- ----- ----- -----
3,570 2,246 +17 3,694 2,297 +15
---------------- ----- ----- ----- ----- ----- -----
Pro Forma constant currency % growth has been calculated as if the Astra
Merck restructuring had occurred on 1 January 1998 and excluding the
effects arising from exchange rate movements.
1st 1st 2nd 2nd
Quarter Quarter % Growth Quarter Quarter % Growth
1999 1998 Constant 1999 1998 Constant
Agrochemicals USDm USDm Currency USDm USDm Currency
------------------ ----- ----- ----- ----- ----- -----
Product Analysis
Herbicides:
Non-Selective 146 155 -8 223 214 +5
Selective 193 223 -13 297 383 -21
------------------ ----- ----- ----- ----- ----- -----
Total
Herbicides 339 378 -11 520 597 -12
Insecticides 100 103 -4 130 160 -19
Fungicides 203 170 +15 272 235 +17
Others 21 33 -36 27 17 +47
------------------ ----- ----- ----- ----- ----- -----
Total
Agrochemicals 663 684 -5 949 1,009 -6
------------------ ----- ----- ----- ----- ----- -----
Territorial
Analysis
North America 171 199 -13 405 480 -16
Latin America 63 93 -32 102 116 -12
Europe 311 293 +3 322 307 +7
Asia, Africa,
Australasia 118 99 +18 120 106 +10
------------------ ----- ----- ----- ----- ----- -----
663 684 -5 949 1,009 -6
------------------ ----- ----- ----- ----- ----- -----
Constant currency % growth has been calculated excluding the effects
arising from exchange rate movements.
9 CONSOLIDATED PROFIT & LOSS ACCOUNT FOR CONTINUING OPERATIONS BEFORE
EXCEPTIONAL ITEMS
First Quarter Second Quarter
1999 1998 1999 1998
USDm USDm USDm USDm
------------------------------------ ----- ----- ----- -----
Sales 4,314 3,002 4,729 3,379
Cost of sales (1,316) (860) (1,452) (1,001)
Distribution costs (86) (78) (81) (80)
Research and development (636) (516) (676) (597)
Selling, general and administrative
expenses (1,368) (925) (1,410) (954)
Other income 40 52 45 36
------------------------------------ ----- ----- ----- -----
Group operating profit 948 675 1,155 783
Share of joint ventures' and
associates' operating profits 19 254 3 305
Net interest 4 26 (37) 12
------------------------------------ ----- ----- ----- -----
Profit on ordinary activities before
taxation 971 955 1,121 1,100
Taxation (293) (284) (331) (352)
------------------------------------ ----- ----- ----- -----
Profit on ordinary activities after
taxation 678 671 790 748
Attributable to minorities - 5 (2) (2)
------------------------------------ ----- ----- ----- -----
Net profit for the period 678 676 788 746
------------------------------------ ----- ----- ----- -----
Earnings per Ordinary Share USD0.39 USD0.38 USD0.44 USD0.42
Diluted earnings per Ordinary Share USD0.39 USD0.38 USD0.44 USD0.42
------------------------------------ ----- ----- ----- -----
Weighted average number of Ordinary
Shares in issue (millions) 1,776 1,778 1,776 1,778
------------------------------------ ----- ----- ----- -----
Diluted average number of Ordinary
Shares in issue (millions) 1,780 1,782 1,780 1,782
------------------------------------ ----- ----- ----- -----
Information for US Investors
RECONCILIATION TO UNITED STATES ACCOUNTING PRINCIPLES
The Group profit and loss account and Group balance sheet set out on pages
8, 10 and 11 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). For
the purposes of US GAAP, the merger has been regarded as a purchase
accounting acquisition of Astra by Zeneca. Under purchase accounting, the
cost of the investment is calculated at the market value of the shares
issued together with other incidental costs and the assets and liabilities
of the acquired entity are recorded at fair value. As a result of the fair
value exercise, increases in the values of Astra's tangible fixed assets
and inventory were recognised and values attributed to their in-process
research and development, existing products and assembled work force,
together with appropriate deferred taxation effects. The difference between
the cost of investment and the fair value of the assets and liabilities of
Astra has been recorded as goodwill. The in-process research and
development and inventory step up have been taken as a one off charge to net
income, together with additional amortisation and depreciation arising as a
result of the fair value exercise. Pre-acquisition results of Astra are
deducted from net income. Other differences as they apply to AstraZeneca
PLC (formerly Zeneca Group PLC) are explained in the Group's 1998 Annual
Report and Form 20-F. The approximate effects on Group income and
shareholders' equity of the GAAP differences are shown below.
1st 1st
Half Half
1999 1998
Income attributable to Shareholders USDm USDm
------------------------------------ ----- -----
Net income for the period under UK
GAAP 832 1,440
Pre-acquisition results of Astra (413) (732)
------------------------------------ -----
Previously presented Zeneca Group
PLC income 708
Adjustments to conform to US GAAP
Purchase accounting adjustments,
(including goodwill and
intangibles):
- deemed acquisition of Astra
- in-process research and
development (3,315) -
- inventory step-up (826) -
- amortisation and other
acquisition adjustments (299) -
- others (42) (48)
Divestment of Specialties business 253 -
Capitalisation, less disposals and
amortisation of interest - 2
Deferred taxation 388 -
Pension expense (64) (28)
Post-retirement benefits/plan
amendment 2 2
Unrealised losses on foreign
exchange 2 -
------------------------------------ ----- -----
Net income/(loss) in accordance
with US GAAP (3,482) 636
------------------------------------ ----- -----
Net income/(loss) from continuing
operations (3,898) 632
Net income from discontinued
operations 23 4
Gain on disposal of Specialties
business 393 -
------------------------------------ ----- -----
Net income/(loss) per Ordinary Share
under US GAAP (basic) USD(1.96) USD0.67
Net income/(loss) per Ordinary Share
under US GAAP (diluted) USD(1.96) USD0.67
------------------------------------ ----- -----
Net income from continuing operations in accordance with US GAAP is
depressed by one off charges of USD3,315m to write off acquired in process
research and development and USD826m (USD485m after tax relief of USD341m)
for the step up in inventory values at acquisition.
RECONCILIATION TO UNITED STATES ACCOUNTING PRINCIPLES (CONTINUED)
30 June 31 Dec
1999 1998
Shareholders' equity USDm USDm
------------------------------------ ----- -----
Shareholders' equity under UK GAAP 11,145 10,929
Assets of Astra before acquisition (6,757)
------------------------------------ -----
Previously presented Zeneca Group
PLC Shareholders' equity 4,172
Adjustments to conform to US GAAP
Purchase accounting adjustments,
(including goodwill and
intangibles):
- deemed acquisition of Astra
- goodwill 14,347 -
- tangible and intangible
fixed assets 11,833 -
- others 865 1,157
Capitalisation, less disposals
and amortisation of interest 146 181
Deferred taxation
- on fair value of Astra (3,358) -
- others (371) (111)
Dividend 408 442
Pension expense (271) (241)
Post-retirement benefits/plan
amendment (33) (42)
Others 60 -
------------------------------------ ----- -----
Shareholders' equity in accordance
with US GAAP 34,771 5,558
------------------------------------ ----- -----
Translation of key financial information
For the six months 1999 1998 1999 1998 1999 1998
ended 30 June USDm USDm GBPm GBPm SEKm SEKm
-------------------- ----- ----- ----- ----- ----- -----
Total Sales 9,658 7,053 6,132 4,478 81,629 59,612
Continuing
operations 9,043 6,381 5,741 4,051 76,341 53,932
Pharmaceuticals 7,264 4,543 4,612 2,884 61,395 38,397
-------------------- ----- ----- ----- ----- ----- -----
Operating profit
before exceptional
items (EI) 2,174 1,536 1,380 975 18,375 12,982
Continuing
operations before
EI 2,103 1,458 1,335 926 17,775 12,323
Pharmaceuticals
before EI 1,838 1,133 1,167 719 15,535 9,576
-------------------- ----- ----- ----- ----- ----- -----
Profit before tax on
continuing
operations before
EI 2,092 2,055 1,328 1,305 17,682 17,369
-------------------- ----- ----- ----- ----- ----- -----
Net profit for the
period 832 1,440 528 914 7,032 12,171
-------------------- ----- ----- ----- ----- ----- -----
Basic earnings per
Ordinary Share USD0.47 USD0.81 29.8p 51.4p SEK3.97 SEK6.85
Earnings per
Ordinary Share
before EI USD0.85 USD0.83 54.0p 52.7p SEK7.18 SEK7.02
-------------------- ----- ----- ----- ----- ----- -----
Dividend per
Ordinary Share USD0.23 USD0.23 14.2p 14.0p SEK1.89 SEK1.82
-------------------- ----- ----- ----- ----- ----- -----
Net cash inflow from
operating
activities 980 1,051 622 667 8,283 8,883
Decrease in cash in
the period (988) (152) (627) (97) (8,351) (1,285)
-------------------- ----- ----- ----- ----- ----- -----
Shareholders' funds
- equity
30 June 1999/31
December 1998 11,145 10,929 7,076 6,939 94,198 92,372
-------------------- ----- ----- ----- ----- ----- -----
Sterling (GBP) and Swedish Kronor equivalents are shown for convenience and
have been calculated using the current period end rates of USD1=GBP0.6349
and USD1=SEK8.4520, respectively. Dividend per Ordinary Share is shown as
the actual amount payable using the rates at the date of declaration of the
dividend.
Shareholder Information
ANNOUNCEMENTS AND MEETINGS
----------------------------------------------------------------------------
Announcement of third quarter and nine months results 3 November 1999
Preliminary announcement of full year results
and announcement of second interim dividend 24 February 2000
Annual General Meeting 26 May 2000
(Provisional)
DIVIDENDS
----------------------------------------------------------------------------
The Board has declared a first interim dividend of 0.23 dollars, 14.2
pence, 1.89 SEK per Ordinary Share in respect of the year 1999 using a
conversion rate of US dollars to pounds sterling of 1 : 0.6194 and US
dollars to Swedish Kronor of 1 : 8.2044.
In 1998 Zeneca Group PLC declared a first interim dividend of 14 pence per
Ordinary Share (equivalent to 0.23 dollars, 1.82 SEK at the exchange rates
on the day of declaration). Astra AB did not declare interim dividends.
Following the abolition of United Kingdom Advance Corporation Tax (ACT) with
effect from 6 April 1999, private individuals or corporate shareholders
owning less than 10% of the voting power of AstraZeneca resident in Sweden
or the US will be entitled to a tax credit of one ninth of the dividend (10%
of the gross dividend) although in practice the tax credit will be nullified
by withholding tax. Each shareholder should consult their tax adviser for
advice on the tax consequences of the dividend in their particular
situation.
The record date for the first interim dividend payable on 25 October 1999
(in the UK, Sweden and the US) is 10 September 1999. Ordinary Shares will
trade ex-dividend on the London Stock Exchange from 6 September 1999 and on
the Stockholm Stock Exchange from 8 September 1999. ADSs will trade
ex-dividend on the New York Stock Exchange from 8 September 1999.
Future dividends will normally be paid as follows:
First interim Announced in early August and paid in late October.
Second interim Announced in February and paid in late April.
TRADEMARKS
----------------------------------------------------------------------------
All product or brand names included in Note 8 of this Interim Statement and
the following names are trademarks of, or licensed to, AstraZeneca PLC or
its subsidiary companies:
Achieve Amistar Bravo Flex Force Fusilade Karate Prilosec Surpass
Touchdown
For simplicity, sales are reported under the above lead brand names, whereas
some compounds are sold under several brand names to address separate market
niches.
ADDRESSES FOR CORRESPONDENCE
----------------------------------------------------------------------------
Registrar and Depositary Registered Office Swedish Securities
Transfer Office for ADRs Register Centre
The AstraZeneca Morgan Guaranty 15 Stanhope Gate Vardepapperscentralen
Registrar Trust Company London VPC AB
Lloyds TSB of New York W1Y 6LN Box 7822
Registrars 60 Wall Street S-103 97 Stockholm
The Causeway New York Sweden
Worthing New York 10260
West Sussex
BN99 6DA
Tel: (01903) Tel: (212) Tel: (0171) Tel: (8)
502 541 648 3208 304 5000 402 9100
Cautionary statement regarding forward-looking statements
In order to utilise the 'Safe Harbour' provisions of the United States
Private Securities Litigation Reform Act of 1995, AstraZeneca is providing
the following cautionary statement. This Interim Report contains certain
forward-looking statements about AstraZeneca. We intend to identify the
forward-looking statements in this Interim Report, by using the words
'anticipates,' 'believes,' 'expects,' 'intends,' and similar expressions in
such statements. Although we believe our expectations are based on
reasonable assumptions, our forward-looking statements are subject to
numerous risks and uncertainties and factors that could cause actual
outcomes and results to be materially different from those projected or
implied. Important factors that could cause actual results to differ
materially from those in our forward-looking statements, certain of which
are beyond our control, include, among other things: risk of loss or
expiration of patents or trademarks (in particular, the expiration in the
near future of patents covering Losec and Zestril); the difficulty of
integrating Zeneca's and Astra's large and complex businesses on a timely
basis and realizing synergies; the risk that R&D will not yield new
products that achieve commercial success; the impact of competition, price
controls and price reductions; the difficulties of obtaining governmental
regulatory approvals for new products; the risk of substantial product
liability claims; exposure to fluctuations in exchange rates for foreign
currencies; exposure to US environmental liabilities and the impact on the
Agrochemicals business from the growing importance to agriculture of
biotechnology and the use of genetically modified crops. No assurances can
be given that any of the events anticipated by our forward-looking
statements will transpire or occur, or if any of them do so, what impact
they will have on the results of operations and financial condition of
AstraZeneca.
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