AstraZeneca delivered a strong financial performance, exceeding the targets set at the beginning of the year. In addition, good progress was made on the pipeline; with five products awaiting regulatory approval, and four significant late stage development projects through our externalisation efforts added. Revenue in the fourth quarter increased by 4 percent at CER, but was up 9 percent on an actual basis as a result of the positive impact of exchange rate movements.
Revenue for the full year increased by 7 percent at constant exchange rates (CER) to $32,804 million.
-Sales of Toprol-XL and Novel Influenza A (H1N1) vaccine in the US accounted for 3 percentage points of the global revenue growth at CER.
-Emerging Markets revenue was up 12 percent at CER, accounting for 13 percent of total Company revenue for the full year.
Core operating profit for the full year increased by 23 percent at CER to $13,621 million on revenue growth and operational efficiencies.
Core EPS for the full year increased by 23 percent at CER to $6.32, in line with guidance.
Reported EPS for the full year increased by 22 percent at CER to $5.19.
Revenue in the fourth quarter increased by 4 percent at CER; Core EPS increased by 7 percent at CER.
Pipeline developments during the year include 4 major regulatory submissions for new products and the addition of 4 significant late stage development assets via in-licensing and acquisitions.
Strong cash flows result in net funds of $535 million at 31 December 2009, compared to net debt of $7,174 million at the end of 2008.
Dividend increased by 12 percent to $2.30 for the full year. Board adopts a progressive dividend policy (See page 4).
The Board announces that up to $1 billion in share repurchases will be completed in 2010.
Restructuring programmes expanded, including newly announced plan to drive Research and Development productivity (See page 2).
Company provides mid-term planning assumptions for the 5-year period ending 2014 (See page 3).
Financial Summary
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David Brennan, Chief Executive Officer, said: “In 2009 we delivered a strong financial performance, exceeding the targets we set at the beginning of the year. In addition, good progress was made on the pipeline;
we now have five products awaiting regulatory approval, and have added four significant late stage development projects through our externalisation efforts.
Our plans for the next five years confirm our commitment to research-based, innovative biopharmaceuticals. I believe successful execution of this strategy will benefit patients and generate the cash flow necessary to
provide for the investment needs of the business and shareholder returns.”
2010 Guidance
Revenue in 2010 will be affected by the expected loss of market exclusivity for Arimidex and for Pulmicort Respules in the US. Compared to a 2009 revenue baseline that included unanticipated contributions from US sales of Toprol-XL and H1N1 pandemic influenza vaccine, the Company expects up to a mid single-digit decline in revenue in 2010 on a constant currency basis. Core Pre-R&D operating margin is expected to be lower than 2009 in constant currency terms, but near the top of the mid-term planning range. Based on the January 2010
average exchange rates for our principal currencies, the target for Core earnings per share is in the range of $5.75 to $6.15.
This target takes no account of the likelihood that average exchange rates for the remainder of 2010 may differ materially from the January 2010 average rates upon which our earnings guidance is based. An estimate of the
sales and earnings sensitivity to movements of our major currencies versus the US dollar is provided in conjunction with this Full Year 2009 results announcement, and can be found on the AstraZeneca website,
www.astrazeneca.com/investors and http://info.astrazenecaevents.com.
Dividends and Share Repurchases
The Board has recommended a 14 percent increase in the second interim dividend to $1.71 (105.4 pence, 12.43 SEK) to be paid on 15 March 2010. This brings the full year dividend to $2.30 (141.4 pence, 16.84 SEK), an increase of 12 percent.
In recognition of the Group’s strong balance sheet, sustainable significant cash flow, and the Board’s confidence in the strategic direction and long-term prospects for the business, the Board has adopted a progressive dividend policy, intending to maintain or grow the dividend each year. The Board recognizes that some earnings fluctuations are to be expected as the Company’s revenue base transitions through this period of exclusivity losses and new product launches. The Board’s view is that the annual dividend will not just reflect the financial performance of a single year taken in isolation, but reflect its view of the earnings prospects for the Group over the entirety of the investment cycle. As a result, dividend cover may vary during the period, but with the target of an average dividend cover of 2 times (ie, a payout ratio of 50 percent), based on reported earnings (before restructuring costs).
In setting the distribution policy and the overall financial strategy, the Board’s aim is to continue to strike a balance between the interests of the business, our financial creditors and our shareholders. After providing for
business investment, funding the progressive dividend policy and meeting our debt service obligations, the Board will keep under review the opportunity to return cash in excess of these requirements to shareholders through periodic share repurchases.
In conjunction with today’s financial results announcement, the Board has announced that the Company will repurchase up to $1 billion in shares during 2010.
There were no share repurchases during 2009. In 2009, 3.5 million shares were issued in consideration of share option exercises for a total of $135 million.
The total number of shares in issue at 31 December 2009 was 1,451 million. |
