Zeneca Group PLC Annual Results 1996.LONDON--(BUSINESS WIRE)--March 11, 1997-- Summary Zeneca Group PLC today announced record sales with profits up 15 per cent for the year ended 31 December 1996. Financial Highlights - Sales up 9 per cent to $9.063 billion (5.363 billion pounds) 1995: $8.28 billion (4.90 billion pounds) - Profit before tax and exceptional items(a) up 15 per cent to $1.709 billion (1.011 billion pounds) 1995: $1,484 million (878 million pounds) - Exceptional items charged in 1996 were 36 million pounds, 1995: 259 million pounds - Earnings per Ordinary Share (before exceptional items) up 14 per cent to 70.6 pence ($3.58 per ADS) 1995: 62.0 pence ($3.14 per ADS) - Earnings per Ordinary Share up 90 per cent to 67.8 pence ($3.44 per ADS) 1995: 35.6 pence ($1.80 per ADS) - Return on sales Return on sales A measurement of operational efficiency equalingnet pre-tax profits divided by net sales expressed as a percentage. return on sales The portion of each dollar of sales that a firm is able to turn into income. increased to 19.4 per cent from 18.3 per cent DIVIDEND - A second interim dividend of 22.5 pence (net of tax credit) per Ordinary Share, making a full year dividend of 35.0 pence (net of tax credit) 1995: full year dividend of 31.0 pence (net of tax credit) - A second interim dividend of $1.43 (including tax credit) per American Depositary Share American Depositary Share (ADS) Foreign stock issued in the US and registered in the ADR system. (ADS), using conversion rate of 1 pound = $1.69, making a total dividend of $2.22 (including tax credit) for the year Zeneca Group PLC today announced profits before tax and exceptional items of 1.011 billion pounds for the year ended 31 December 1996, an increase of 15 per cent. REVIEW OF OPERATIONS "1996 was a further year of substantial success for Zeneca, with profits of over 1 billion pounds achieved for the first time," said Sir David Barnes David Barnes is the name of a number of people:
"1996 was also a year which established a strong platform for the future. Extraordinary activity in the development and launch of new products has produced a record number of national product approvals in Pharmaceuticals; in Agrochemicals the progress of Amistar has continued apace, with the first US approval (under the trademark Heritage) received in February 1997. New products are a key element of Zenecas future growth and I am pleased to announce that UK approval for our new migraine migraine (mī`grān), headache characterized by recurrent attacks of severe pain, usually on one side of the head. It may be preceded by flashes or spots before the eyes or a ringing in the ears, and accompanied by double vision, nausea, treatment Zomig was granted yesterday. In order to support this growth we have increased the level of investment in R & D and capital expenditure whilst generating a significant cash surplus. This leaves the Group ungeared Adj. 1. ungeared - having gears not engaged or disconnected; "the machine's ungeared pinion" geared - equipped with or connected by gears or having gears engaged at the end of 1996." PHARMACEUTICALS Sales increased by 13 per cent and operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. by 10 per cent. The following business sector comments exclude effects arising from exchange rate movements, acquisitions or disposals. As expected, ongoing heavy development and launch costs have continued to suppress the underlying operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: which, excluding the impact of exchange rate movements, was around 30 per cent. Zestril sales increased by 10 per cent with continuing strong sales in a number of European markets. The US wholesaler stockbuilding, which was highlighted at the half year, has now largely been worked through, while Zestrils overall US market share has been maintained around 19 per cent. Tenormin sales were two per cent lower. Sular was launched in the US and a number of European markets during the year. Zoladex had another excellent year, with sales up 31 per cent. Nolvadex sales were six per cent lower. Sales of the new oncology products were strong. Casodex, now launched in 15 markets, exceeded expectations with sales of 68 million pounds. Sales were particularly strong in the US where Casodex gained over 45 per cent of total prescriptions just 15 months after launch. Arimidex, too, had a good year, with sales of 20 million pounds. Now launched in 12 countries, Arimidex has achieved significant market share in a number of these markets. Tomudex was launched in a small number of markets during the year and Kadian was launched in the US in August. Diprivan sales were up 16 per cent. The US launch of Accolate has been well received and early prescription data is encouraging. Sales of Merrem were broadly in line with our expectations. Filings were made for both Seroquel and Zomig in 1996. Faslodex, the pure anti-oestrogen (formerly 182,780) has recently entered Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA development, but Zenecas development of ZD0870 for serious fungal diseases fungal diseases or mycoses Diseases caused by any fungus that invades the tissues. Superficial fungal infections (e.g., athlete's foot) are confined to the skin. has been terminated. In the USA sales were up 12 per cent, with three-quarters of this increase coming from products launched in the last two years. Zoladex grew strongly with sales up 57 per cent mainly due to the launch of the three month depot in early 1996. In Japan sales were up six per cent with good volume growth, particularly from Zoladex and Diprivan, partially offset by the negative impact of Government imposed price reductions. In Europe, sales in Germany, Italy and France grew by 15 per cent, 14 per cent and five per cent respectively while UK sales were up 16 per cent. SALICK Salick's underlying sales, for the period 1 December 1995 to 30 November 1996 were up 10 per cent. Operating profit fell due mainly to investments for future growth. AGROCHEMICALS AND SEEDS Agrochemicals and Seeds increased sales by 10 per cent and operating profit by 56 per cent due in part to significantly lower Seeds losses. Results for the Seeds business were consolidated to the end of July; from 1 August, Advanta, the joint venture with Cosun, has been accounted for as an Associated Company associated company associate n → Partnerfirma f associated company n → società collegata . Agrochemicals sales increased by 12 per cent and operating profit by 18 per cent. The following business sector comments exclude effects arising from exchange rate movements, acquisitions or disposals. Agrochemicals achieved sales growth of 11 per cent, making 1996 the second successive year of double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" sales growth; agricultural markets remained generally buoyant Buoyant The term used to describe a commodities market where the prices generally rise with ease when there are considerable signals of strength. Notes: These types of markets can be very volatile as the prices are rapid to rise and fall with investor sentiment. . Herbicide herbicide (hr`bəsīd'), chemical compound that kills plants or inhibits their normal growth. A herbicide in a particular formulation and application can be described as selective or nonselective. sales increased 14 per cent with new sales records set for the non-selective herbicides Gramoxone, Touchdown and the maize maize: see corn. herbicide, Surpass; cereal herbicides also performed strongly. Insecticide insecticide Any of a large group of substances used to kill insects. Such substances are mainly used to control pests that infest cultivated plants and crops or to eliminate disease-carrying insects in specific areas. sales grew 11 per cent led by further success with the pyrethroids pyrethroids synthetic substances with activity similar to the naturally occurring pyrethrins. They include cypermethrin, cyhalothrin, deltamethrin, flumethrin, permethrin. Karate karate: see martial arts. karate Martial art in which an attacker is disabled by crippling kicks and punches. Emphasis is on concentration of as much of the body's power as possible at the point and instant of impact. and Force. Fungicide fungicide (fŭn`jəsīd', fŭng`gə–), any substance used to destroy fungi. Some fungi are extremely damaging to crops (see diseases of plants), and others cause diseases in humans and other animals (see fungal infection). sales increased by nine per cent with established products performing well in a highly competitive sector, helped by new applications in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . The new broad spectrum fungicide, Amistar, achieved its first registrations and will be fully launched in 1997. In North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. sales grew by 11 per cent, well ahead of the overall market. New formulations of Surpass helped maintain growth since launch in 1994. Despite a reduced cotton acreage, Karate continued to grow strongly on an expanded range of crops. European sales increased by seven per cent with growth across the product range; France and Spain performed particularly well. Early registration of Amistar in Germany and Ireland enabled pre-launch test marketing in 1996; results met all expectations. Asia-Pacific and Africa sales increased by 14 per cent with Gramoxone, Touchdown and the insecticides insecticides, chemical, biological, or other agents used to destroy insect pests; the term commonly refers to chemical agents only. Chemical Insecticides Karate and cypermethrin performing well. Favourable weather in Australia, following extensive drought, and good performances in Thailand and Indonesia featured strongly. In Latin America sales increased by 16 per cent. The market in Mexico recovered following the sharp downturn of 1995; continued strong growth in Brazil and Argentina reinforced Zenecas position as a leading supplier in the region. SPECIALTIES In 1996 the Specialty Inks, Textile Colours and some Biological Products businesses were divested. Following this restructuring, sales fell by one per cent and operating profit grew by 25 per cent. The following business sector comments exclude effects arising from exchange rate movements, acquisitions or disposals. Underlying sales growth was eight per cent. Sales in the Organic Chemicals sector improved by four per cent. Industrial Colours sales grew strongly in the second half, and were up seven per cent for the full year, with the specialist colours segment more than offsetting the weakness in pigments and paper dyes. LifeScience Molecules, supplying agrochemical agrochemical Any chemical used in agriculture, including chemical fertilizers, herbicides, and insecticides. Most are mixtures of two or more chemicals; active ingredients provide the desired effects, and inert ingredients stabilize or preserve the active ingredients or aid and pharmaceutical intermediates, grew by 34 per cent. Performance and Intermediate Chemicals sales were flat. The Coatings sector showed continued growth, with sales up seven per cent. Stahl achieved strong sales, up 15 per cent, with the high demand experienced in the first half prevailing throughout the year. Resins growth accelerated in the second half with sales up four per cent overall. Sales of Quorn grew substantially following the introduction of several new product lines. Investments & divestments Cash investment in fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → amounted to 373 million pounds, an increase of 94 million pounds over 1995. Capital expenditure is running at 1.7 times depreciation as investment in manufacturing capacity for new products continues. New production facilities for Amistar were officially opened in the fourth quarter; Touchdown and Karate expansion projects are progressing well and plans were announced to double the capacity for the Gramoxone plant to be built in China. A new comprehensive cancer centre for Salick at Saint Vincents Hospital, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , is now operational. During the year, the Group acquired Zomig and licensed Sular for a number of major markets and Kadian for the US market. Further external collaborations have been established with Incyte Pharmaceuticals Inc, OncorMed, Rutgers University Rutgers University, main campus at New Brunswick, N.J.; land-grant and state supported; coeducational except for Douglass College; chartered 1766 as Queen's College, opened 1771. Campuses and Facilities Rutgers maintains three campuses. , and more recently with Pharmacopeia pharmacopeia /phar·ma·co·pe·ia/ (-ko-pe´ah) an authoritative treatise on drugs and their preparations. See also USP. pharmacopei´al United States Pharmacopeia see under U. Inc, and Xenova. The strategic initiatives within Specialties, announced in March 1996, have been completed with the sale of both Specialty Inks and Textile Colours. Losses associated with the Textile Colours disposal, of 36 million pounds, have been charged as an exceptional item. Interest The net interest expense for 1996 was 13 million pounds, 6 million pounds lower than in 1995, mainly due to higher trading cash flows and the proceeds from disposals. Taxation The taxation charge for 1996 was 320 million pounds. On a pre-exceptional basis, the underlying rate for 1996 was 32.7 per cent (1995: 31.5 per cent). Dividends Zeneca Group PLC today declared a second interim dividend for 1996 of 22.5 pence (net of tax credit) per 25 pence Ordinary Share ($1.43 per ADS, including tax credit), which the Annual General Meeting will be asked to confirm as the final dividend. This, together with the first interim dividend of 12.5 pence (net of tax credit), makes a total dividend of 35.0 pence (net of tax credit) for the year ($2.22 per ADS, including tax credit). Payment will be on 6 May 1997 (13 May 1997 in the US through Morgan Guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. Trust Company) to all shareholders on the register on 21 March 1997. Future Prospects Based on continuing new product launches and expanding activity in selected emerging markets, 1997 is expected to provide a further year of strong volume growth. Ongoing market development and launch costs associated, in particular, with Accolate, Seroquel, Zomig and Amistar will continue to restrain short-term profit growth but should significantly enhance the long-term prospects of the Group. Sir David Barnes Chief Executive Zeneca Group PLC CONTACT: Media Inquiries: Steve Brown/Isobel Hoseason (London), (0171)304 5033/5034 Judith Auchard (Wilmington), 302/886-3638 or Analyst/Investor Inquiries: Angus Russell/Elizabeth Sutton (London) (0171) 304 5100/5101 Ed Seage (Wilmington), 302/886-4065 |
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