AstraZeneca Fourth Quarter and Full Year Results 2009
Revenue in the fourth quarter increased by 4 percent at constant exchange rates (CER), but was up 9 percent on an actual basis as a result of the positive impact of exchange rate movements. Revenue benefited from strong growth of the Toprol-XL franchise in the US as a result of the market withdrawal by two generic competitors and from revenues from US government orders for vaccine for Novel Influenza A (H1N1); adjusting for these factors, global revenue was unchanged. US revenue was up 4 percent. Excluding Toprol-XL and H1N1 vaccine sales, US revenue was down 5 percent, due to a decline in Synagis revenue, lower levels of inventory stock building compared to last year and a provision for trade inventories of Pulmicort Respules following the launch of the Teva generic under license from the Company. Revenue in the Rest of World was up 4 percent. Revenue in Established Markets was up 2 percent. Emerging Markets revenue growth was 10 percent.
Core operating profit in the fourth quarter was up 6 percent to $3,044 million. The Core operating profit contribution from gross margin improvement was largely offset by increased expenditures in SG&A and lower other income. The stronger than expected revenue performance for the year provided the headroom for increased investment in sales and marketing programmes to support growth in the Emerging Markets, key franchises in the US and launch preparations for the new products awaiting registration. Higher legal expenses also contributed to the increased SG&A expense in the quarter. Adjustments to Core operating profit were $719 million in the quarter, including $211 million of impairment charges, chiefly related to revised estimates of future other income to be derived from intangible assets acquired with MedImmune. Total adjustments were $74 million lower than last year, reflecting significantly lower restructuring costs partially offset by higher intangible impairments and $98 million in legal provisions related primarily to an agreement in principal to settle certain claims related to average wholesale price litigation. Reported operating profit increased by 13 percent, above the rate of Core operating profit growth, as adjusting items were a higher proportion of Core operating profit in
the prior year period compared with this year.
Core earnings per share in the fourth quarter were $1.42 compared with $1.25 in the fourth quarter 2008, a 7 percent increase at CER. Reported earnings per share were up 16 percent, reflecting the aforementioned differences in Core adjustments between the periods.
Revenue for the full year increased by 7 percent at CER, but was up 4 percent on an actual basis as a result of the negative impact of exchange rate movements. Global revenue growth was 4 percent excluding US Toprol-XL and H1N1 vaccine sales. Revenue in the US was up 9 percent (2 percent excluding Toprol-XL and H1N1 vaccine sales). Revenue in the Rest of World was up 6 percent. Revenue in Established Markets was up 4 percent. Revenue in Emerging Markets increased by 12 percent.
Core operating profit increased by 23 percent to $13,621 million as a result of revenue growth, operating efficiencies and disposal gains within other income. Adjustments to Core operating profit were $2,078 million, $264 million higher than last year, with lower restructuring costs and intangible impairments more than offset by the legal provisions taken in 2009. Reported operating profit increased by 24 percent, in line with the increase in Core operating profit.
Core earnings per share for the full year were $6.32, an increase of 23 percent, in line with the growth in Core operating profit. Reported earnings per share were up 22 percent to $5.19.
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."
An interview with David Brennan, Chief Executive Officer is available on www.astrazeneca.com and http://info.astrazenecaevents.com.