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SMITHKLINE BEECHAM ANNOUNCES FIRST QUARTER 1993 RESULTS: EARNINGS INCREASE 14 PERCENT; SALES UP 26 PERCENT

    PHILADELPHIA, April 20 /PRNewswire/ -- SmithKline Beecham (NYSE: SBH) (SB) announced today that sales rose 26 percent for the three months ended March 31, 1993.
    Pre-tax profit was up 12 percent and earnings per share increased 14 percent to 11.2 cents/7.5 pence.
    At comparable rates of exchange, sales for the three month period ended March 31, rose 11 percent and pre-tax profits, 10 percent.  Sales are inflated by the weakness of sterling against other world currencies. Profits are less affected by currency fluctuations, due to SB's normal hedging policy.
    Commenting on the results, Robert P. Bauman, SmithKline Beecham chief executive, said:
    "We have had four years of substantial growth, and are making excellent progress towards our long-term business and financial objectives.  SB is on the right track for ongoing growth despite an increasingly challenging worldwide environment.
    "Controlling healthcare costs is a priority, but government leaders should understand that medicines, which account for less than 10 percent of total medical costs in most countries, dramatically lower costs by maintaining health and limiting the need for far more expensive surgery and hospitalization.
    "It is important that in the search for ways to manage overall healthcare costs, the productivity of pharmaceutical research is not undermined.
    "If the search for cures for cancer, AIDS and other medical needs is diminished, the suffering of individuals with these diseases will go on, while the long-term cost of caring for them will increase significantly," he said.
    The following business sector comparisons are made at comparable exchange rates:
                     Pharmaceuticals
    Sales increased 15 percent and profit was up 12 percent for the quarter.  Performance was led by U.S. sales which grew 25 percent.
    Performance in the first quarter benefited from strong sales, primarily of new products which were not fully reflected in all markets in the first quarter of 1992.
    In Europe, where sales were impacted by price controls and weak markets, sales growth averaged 3 percent.  In Germany and Italy, where controversial new legislation had a negative impact, sales fell 11 percent and 15 percent respectively.  In France and the U.K., sales rose 19 percent, and 10 percent respectively.
    In Japan, sales were up 34 percent, reflecting the continued success of Kytril following its launch in May 1992.
    New products made a significant contribution to first quarter sales, totalling $142 million/95 million pounds sterling, compared with their contribution of $371 million/212 million pounds for full year 1992.
    These are:
    Seroxat is now the fastest growing antidepressant in the United Kingdom.  Successfully introduced in the United States in early 1993, Paxil has been accepted for use by 70 percent of all U.S. managed care organizations.  It was approved in 24 markets by the end of the first quarter of 1993.
    Relafen, the arthritis medication, was introduced in the United States in the second quarter of 1992, and is now the No. 2 branded NSAID in the country, with 8.3 percent of new  prescriptions.
    Kytril, the injectable anti-emetic for patients undergoing cancer therapy, is now approved in 26 markets.
    Havrix, the world's first hepatitis A vaccine, had strong sales on launch in 15 markets.
    Augmentin, the broad spectrum antibiotic, had a 22 percent increase in sales over a weak first quarter 1992, to $316 million/212 million pounds.
    Engerix-B, the genetically engineered hepatitis B vaccine, continued exceptional sales growth, up 106 percent year-to-year.
    Tagamet, the peptic ulcer medicine, had, as anticipated, a 23 percent decline in sales in the United States against an unusually strong first quarter 1992.
                      Animal Health
    Sales were up 10 percent and operating profit increased 3 percent as animal health registered improved sales in all markets.
    North American sales were up 10 percent.  Strong sales in livestock biologicals continued, and sales of companion animal products gained momentum.
    European sales were up 9 percent year-to-year, reflecting stronger sales in growth enhancers, antibiotics and biologicals.
                     Consumer Brands
    Consumer Brands sales from continuing operations were up 8 percent, and profits were flat in the first quarter.
    In the 1992 first quarter, there was a contribution from Manetti Roberts toiletries in Italy and personal care brands in North America, both of which were sold later in the year.  As a consequence of that contribution, overall Consumer Brands sales were down 1 percent, and profits down 14 percent in the first quarter of 1993.
    In North America, sales were up 11 percent, reflecting the initial contribution from the partnership with Marion Merrell Dow.
    International market sales were up 17 percent.  European health and personal care sales, including the United Kingdom, were up 7 percent.
    Oral care sales worldwide rose 15 percent; Tums were up 17 percent; Contac 13 percent; and health drinks up 1 percent.  Oxy dermatological products were down 3 percent.
                  Clinical Laboratories
    Clinical Laboratories performance remained strong, with sales up 16 percent and operating profit up 17 percent.  Clinical Labs operations continued to achieve improved service and efficiency through the expansion of SCAN, a pioneering electronic link between physicians and hospitals, and SBCL.
    Clinical Laboratories operations benefited from expansion through several major acquisitions in 1992, including facilities in Lakeville, N.Y.; San Diego and Huntsville, Ala.
                        Dividend
    SB today declared a first quarter dividend of 2.533 pence per A share, 4.896 cents per Equity Unit and 24.480 cents per Equity Unit ADR (SBE).  Payment will be on July 15, 1993, to holders of record on May 28, 1993.  An exchange rate of $1.5462 to 1 pound has been used, which was the opening exchange rate in London on April 20, 1993.
    SmithKline Beecham -- one of the world's leading healthcare companies -- discovers, develops, manufactures and markets human and animal pharmaceuticals, over-the-counter medicines, and clinical laboratory testing services.
                        SMITHKLINE BEECHAM
                Consolidated Profit and Loss Account
                   First quarter ended March 31, 1993
                            (Unaudited)
                                 1993     1992                  1993
                                Pounds   Pounds   Increase     Dollars
                                million  million   percent    million(B)
    Sales (C)                     1,523   1,206       26       2,269
    Cost of goods sold             (498)   (407)     ---        (742)
    Gross Profit                  1,025     799       28       1,527
    Selling, general and
      administrative expenses      (583)   (412)     ---        (869)
    Research and development
      expenditure                  (131)   (104)     ---        (195)
    Trading Profit (C)              311     283       10         463
    Share of profits of associated
      undertakings                    1       1      ---           2
    Interest                         (6)    (12)     ---          (9)
    Profit on ordinary activities
      before taxation               306     272       12         456
    Tax on profit on ordinary
      activities (D)                (99)    (88)     ---        (148)
    Profit on ordinary activities
      after taxation                207     184       13         308
    Minority interests               (3)     (4)     ---          (4)
    Auction Rate Preference Share
      dividends                      (4)     (4)     ---          (6)
    Profit attributable to
      shareholders                  200     176       14         298
    Dividends payable               (76)    (64)     ---        (113)
    Retained profit                 124     112      ---         185
    Earnings per
      Share/Equity Unit (E)         7.5p    6.6p      14        11.2c
    Earnings per Equity
      Unit ADR (E)                 37.5p   33.0p      14        55.9c
                        SMITHKLINE BEECHAM
                  Summary Consolidated Balance Sheet
                       March 31, 1993 -- unaudited
                                       March 31   March 31   March 31
                                          1993      1992      1993
                                         Pounds    Pounds    Dollars
                                         million   million   million(B)
    Fixed Assets                          1,928     1,643     2,873
    Current Assets                        3,554     2,809     5,295
    Creditors due within 1 year          (2,596)   (2,532)   (3,868)
    Net current assets                      958       277     1,427
    Creditors due after more than 1 year (1,291)     (746)   (1,923)
    Net Assets                            1,595     1,174     2,377
    SB Shareholders' Equity               1,030       677     1,535
    Auction Rate Preference
      Shares of subsidiary                  537       462       800
    Minority interests                       28        35        42
    Total Shareholders' Funds             1,595     1,174     2,377
                      Summary Cash Flow Statement
            First Quarter ended March 31, 1993 -- unaudited
    Quarter ended March 31             1993          1992
                                      Pounds        Pounds
                                      million       million
    Inflow from trading activities      240           260
    Net interest and dividends paid     (75)          (73)
    Tax paid                           (106)          (34)
    Investing activities --
      purchases less sales of
      tangible fixed assets             (57)          (39)
    Free cash flow                        2           114
    Restructuring costs paid            (10)          (23)
    Investing activities -- other        (8)            15
    Net cash (outflow) inflow           (16)           106
    Financing inflow                    379            19
    Increase in cash and
      cash equivalents                  363          125
    Total net borrowings
      At beginning of period           (392)         (502)
    Exchange restatement                (10)          (63)
    Net cash (outflow) inflow           (16)           106
    Issue of share capital                3             5
    At end of period                  (415)         (454)
                           SMITHKLINE BEECHAM
               Notes on the Interim Financial Statements
                    First Quarter ended March 31, 1993
    (A) Basis of Preparation
    The unaudited results for the three months ended March 31, 1993, have been prepared in accordance with U.K. generally accepted accounting principles.  The accounting policies applied are those set out in the Annual Report and Accounts for the year ended Dec. 31, 1992, as modified to reflect the changes set out below following the introduction of new U.K. accounting standards:
    FRS3 "Reporting Financial Performance"
    This standard became effective for the Company from Jan. 1, 1993. As part of the requirements of the standard, the accounting policy for Tangible Fixed Assets and Depreciation has been amended to include the following:
    "The profit or loss on the disposal of an asset is calculated as the difference between the net sale proceeds and the net book value, whether carried at historic cost or at valuation."
    FRS3 had no impact in the quarters ended March 31, 1993 and 1992.
    SSAP24/UITF Abstract 6 "Accounting for Post-Retirement Benefits"
    From Jan. 1, 1993, the company's accounting policy for Retirement Benefits has been amended so that all post-retirement benefits are accounted for on an accruals basis.  The amended policy is:
    "The cost of providing post-retirement benefits is charged to the profit and loss account over the period benefiting from the employees' services and is based on the advice of actuaries.  The difference between the charge to the profit and loss account and any contributions paid to retirement plans (where they exist), is included as an asset or liability in the balance sheet."
    Under UK GAAP, the change in policy has been reflected in the accounts as a prior period adjustment with the comparatives restated. An amount of 168 million pounds was charged to reserves on Jan. 1, 1993, reflecting a provision of 280 million pounds less a deferred tax asset, which has been set up in full, of 112 million pounds.  At Jan. 1, 1992, the provision was 259 million pounds and the deferred tax asset 103 million pounds.
    In addition, the Deferred Taxation policy has been amended to include the following:
    "For post-retirement benefits other than pensions, deferred taxation has been set up in full."
    The accounts for the three months ended March 31, 1992, have been restated for the effects of changing the policy for post-retirement benefits as follows:
                                   March 31, 1992         March 31, 1992
                                     As Published  Adjustment  Restated
                                         Pounds      Pounds      Pounds
                                         million     million     million
    Consolidated Profit and Loss Account:
    Trading Profit                          289          (6)        283
    Tax on profit on ordinary activities    (90)          2         (88)
    Profit on ordinary activities
      after taxation                        188          (4)        184
    Consolidated Balance Sheet:
    Current Assets                        2,704         105       2,809
    Creditors due after more than 1 year   (481)       (265)       (746)
    SB Shareholders' equity                 837        (160)        677
    (B) Convenience Translation
    In these Financial Statements, the translation of pounds sterling into U.S. dollars has been made at the following rates:
    Profit and Loss Account/Cash Flow Statement: $1.49 to 1 pound (the average rate for the three months ended March 31, 1993)
    Balance Sheet: $1.49 to 1 pound (the rate applicable at March 31, 1993).
    (C) Segment Information:
    Three months                 1993     1992    Increase/     1993
    ended March 31, 1993        Pounds   Pounds  (Decrease)    Dollars
                                million  million   percent    million(B)
    Sales:
    Pharmaceuticals                886      674       32       1,320
    Animal Health                   95       74       27         141
    Consumer Brands                355      322       10         529
    Clinical Laboratories          187      136       38         279
    Total                        1,523    1,206       26       2,269
    Trading Profit:
    Pharmaceuticals                245      215       14         365
    Animal Health                   13       13        5          19
    Consumer Brands                 37       43      (14)         55
    Clinical Laboratories           16       12       22          24
    Total                          311      283       10         463
    (D) Taxation
    Taxation has been calculated on the basis of the estimated effective tax rate for the year ending Dec. 31, 1993.
    (E) Earnings per share:
    Three months                               1993     1992     1993
    ended March 31, 1993                      Pounds   Pounds   Dollars
    Profit attributable to shareholders        200m     176m     $298m
    Average number of A and B Shares         2,671m   2,664m    2,671m
    Earnings per Share/Equity Unit             7.5p     6.6p     11.2c
    Earnings per Equity Unit ADR              37.5p    33.0p     55.9c
    (F) Shareholders' Report
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