SMITHKLINE BEECHAM ANNOUNCES 1992 RESULTS: EARNINGS INCREASE 14 PERCENT; SALES UP 11 PERCENT
PHILADELPHIA, Feb. 23 /PRNewswire/ -- SmithKline Beecham (NYSE: SBH) announced today that sales rose 11 percent for the year ending Dec. 31, 1992. Pre-tax profit was up 11 percent and earnings per share increased 14 percent to 47.8 cents/27.3 pence. For the fourth quarter, sales were up 18 percent, pre-tax profit increased 16 percent and earnings per share rose 19 percent to 13.3 cents/7.6 pence. At comparable rates of exchange, sales for the year rose 10 percent, pre-tax profits 15 percent, and earnings per share 17 percent. Commenting on the results, Robert P. Bauman, SmithKline Beecham chief executive, said: "1992 was a very successful year. "The key to SmithKline Beecham's success is our ability to exploit globally our marketing and selling strengths and to maximize the potential of the growing number of new products emerging from our pipeline. "Our basic strategies of building leadership in research and development, being the most effective marketers, the best managed company and the lowest-cost producer are moving forward. We are on the right track for continued growth despite an increasingly challenging worldwide environment." The following business sector comparisons are made at comparable exchange rates. Pharmaceuticals Sales increased 15 percent and operating profit (trading profit) was up 12 percent for the year. Performance was led by U.S. sales, which grew an impressive 16 percent. European performance was highlighted by a 14 percent increase in sales in France, a 12 percent rise in Italy, and 10 percent growth in Spain. Pharmaceutical sales registered excellent growth in smaller, developing markets. In Eastern Europe, sales rose 92 percent; in Africa, 29 percent; and, in China, 68 percent. New products made a significant contribution to sales in 1992. Sales of SB's four major new products totalled more than $350 million/200 million pounds sterling. Seroxat/Paxil is the fastest growing antidepressant in the U.K., Netherlands and Ireland. It was approved in 25 markets in 1992 including, at year's end, the United States. Relafen, the arthritis medication, finished its first 10 months in the U.S. market as one of the three top products in its category. Kytril, the injectable anti-emetic for patients undergoing cancer therapy, was approved in 12 markets. It had strong performance in Japan, France and Switzerland. Havrix, the world's first hepatitis A vaccine, had strong sales on launch in six European markets and Hong Kong. Augmentin, the broad spectrum antibiotic, became SB's second $1 billion drug with sales of $1.03 billion/589 million pounds, a 14 percent increase over 1991. Sales growth accelerated in European and Asian markets. U.S. sales increased in a weak market. Engerix-B, the genetically engineered hepatitis B vaccine, had an extraordinary year with sales increasing 154 percent. The increase reflected the growing awareness of the importance of hepatitis B vaccination and, to a lesser degree, supply problems of a competitor. Sales of Tagamet, the peptic ulcer medicine, topped $1 billion for the seventh straight year. Animal Health Animal Health finished the year with a good fourth quarter. For the year, sales were up 4 percent and operating profit increased 2 percent despite weak global markets. Excluding the impact of the FDA-mandated withdrawal of nitrofuran products from the U.S. market in the fourth quarter of 1991, sales would have increased 7 percent and operating profit 10 percent. The resurgence in the fourth quarter was paced by strong sales of cattle biologicals in the U.S. and strong biological and antibiotic sales in Europe. SmithKline Beecham's leadership in animal vaccines was bolstered by the introduction of One Shot, a single-dose vaccine against bovine shipping fever, and Defensor, a three-year rabies vaccine for cats and dogs. Consumer Brands Consumer Brands had a sales increase of 1 percent. Operating profit was up 10 percent due to a continued drive for efficiencies and as a result of the disposal of several personal care product lines in connection with a strategic repositioning intensifying focus on healthcare. Major brands continued to perform well. Sales of Tums increased 23 percent and Oxy increased 6 percent. In health drinks, Ribena sales were up 10 percent, Horlicks rose 5 percent and Lucozade was unchanged from 1991. Oral Care products increased 12 percent, led by Germany, where SmithKline Beecham is now the leader in the category, and the U.K., where the company is the leader in toothpastes. The Aquafresh line extension to include a toothpaste for sensitive teeth and the acquisition of Corsodyl, a clinically tested gum disease treatment with potential to become a major brand in Europe, enhanced SB's oral care business. A key event in 1992 was the partnership in the United States with Marion Merrell Dow, which strengthened the potential for leadership in over-the-counter medicines. Also, to bring a more global perspective to the worldwide development of major brands, the business was reorganized with the former regional structure being replaced by a category management system with global product responsibility. Clinical Laboratories Clinical Laboratories had another record year with sales up 11 percent and operating profit up 16 percent. On a local currency basis, clinical laboratories reached the $1 billion dollar sales milestone in 1992. Growth was led by industrial drug testing which increased 46 percent, double the pace of the growing U.S. market. New marketing initiatives in 1992 included the National Sports Testing Center in Atlanta, providing substance abuse testing for professional, college and high school athletes. The company also established the Clinical Trials Euro Centre at Genval, Belgium, the first laboratory for centralized testing for companies conducting clinical trials in Europe. Dividend A quarterly dividend of 2.375 pence per A Share equivalent to 4.605 cents per Equity Unit and 23.025 cents per Equity Unit ADR (SBE) has been declared. Payment will be on April 15, 1993, to shareholders of record on March 11, 1993. An exchange rate of $1.4542 to 1 pound has been used, which was the opening exchange rate in London on Feb. 23, 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 Year ended Dec. 31, 1992 (Unaudited) 1992 1991 Increase 1992 Pounds Pounds percent Dollars million million million(A) Sales (B) 5,219 4,685 11 9,133 Cost of goods sold (1,763) (1,647) (3,085) Gross profit 3,456 3,038 14 6,048 Selling, general and administrative expenses (1,837) (1,549) (3,215) Research & development expenditure (478) (432) (836) Trading profit (B) 1,141 1,057 8 1,997 Share of profits of associated undertakings 5 4 8 Interest (31) (59) (54) Profit on ordinary activities before taxation 1,115 1,002 11 1,951 Tax on profit on ordinary activities (C) (360) (329) (630) Profit on ordinary activities after taxation 755 673 12 1,321 Minority interests (11) (11) (19) Auction Rate Preference Share dividends (16) (24) (28) Profit attributable to shareholders 728 638 14 1,274 Dividends payable (D) (267) (238) (467) Profit retained 461 400 807 Earnings per Share/Equity Unit (E) 27.3p 24.0p 14 47.8c Earnings per Equity Unit ADR (E) 136.5p 120.0p 14 238.9c (A) The translation of pounds sterling into U.S. dollars has been made at $1.75 to 1 pound (the average rate for the year ended Dec. 31, 1992) solely for the convenience of the reader. SMITHKLINE BEECHAM Summary Consolidated Balance Sheet As of Dec. 31, 1992 (unaudited) Dec. 31 Dec. 31 Dec. 31 1992 1991 1992 Pounds Pounds Dollars million million million(A) Fixed Assets: Tangible assets 1,846 1,551 2,787 Investments 64 44 97 Total 1,910 1,595 2,884 Current assets: Stocks 582 526 879 Debtors - due within one year 1,366 1,100 2,063 - due after more than one year 105 104 158 Cash and investments 1,136 782 1,715 Total 3,189 2,512 4,815 Creditors - within one year Loans and overdrafts (1,309) (1,032) (1,977) Other (1,640) (1,356) (2,476) Total (2,949) (2,388) (4,453) Net current assets 240 124 362 Total assets less current liabilities 2,150 1,719 3,246 Creditors - more than one year Loans (219) (252) (331) Other (55) (29) (83) Provisions for liabilities and charges (240) (234) (362) Total (514) (515) (776) NET ASSETS 1,636 1,204 2,470 Capital and reserves: Called up share capital 356 351 538 Reserves 724 392 1,093 SB Shareholders' Equity 1,080 743 1,631 Auction Rate Preference Shares of subsidiary 530 428 800 Minority interests 26 33 39 TOTAL SHAREHOLDERS' FUNDS 1,636 1,204 2,470
(A) The translation of pounds sterling into U.S. dollars has been made at $1.51 to 1 pound (the rate applicable at Dec. 31, 1992) solely for the convenience of the reader.
SMITHKLINE BEECHAM Cash Flow Statement Year ended December 31, 1992 (unaudited) Dec. 31 Dec. 31 Dec. 31 1992 1991 1992 Pounds Pounds Dollars million million million(A) Net cash inflow from trading activities 1,294 1,122 2,265 Restructuring costs paid (120) (177) (210) Returns on investments and servicing of finance: Net interest paid (34) (59) (59) Dividends paid (269) (261) (471) Net cash outflow from returns on investments and servicing of finance (303) (320) (530) Tax paid (227) (216) (397) Investing activities: Purchase less sale of tangible fixed assets (275) (244) (481) Purchase of businesses (150) (22) (263) Sale of businesses 87 57 152 Purchase of trade investments (13) (11) (23) Net cash outflow from investing activities (351) (220) (615) Net cash inflow before financing 293 189 513 Financing: Issue of share capital 18 21 32 Movements in longer term financing (54) (143) (95) Net cash outflow from financing (36) (122) (63) Increase in cash and cash equivalents 257 67 450 Total net borrowings: At beginning of year (502) (676) (879) Exchange restatement (201) (36) (352) Net cash inflow 293 189 513 Issue of share capital 18 21 32 At end of year (392) (502) (686)
(A) The translation of pounds sterling into U.S. dollars has been made at $1.75 to 1 pound (the average rate for the year ended Dec. 31, 1992) solely for the convenience of the reader.
SMITHKLINE BEECHAM Notes 1. BASIS OF PREPARATION The unaudited results for the year ended Dec. 31, 1992, 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. (B) Segment Information: 1992 1991 Increase/ 1992 Pounds Pounds (Decrease) Dollars million million percent million(A) SALES BY BUSINESS SECTOR Pharmaceuticals 2,889 2,470 17 5,056 Animal Health 337 318 6 590 Consumer Brands 1,384 1,358 2 2,422 Clinical Laboratories 609 539 13 1,065 TOTAL 5,219 4,685 11 9,133 TRADING PROFIT BY BUSINESS SECTOR Pharmaceuticals 758 694 9 1,327 Animal Health 62 63 (2) 108 Consumer Brands 244 232 5 427 Clinical Laboratories 77 68 14 135 TOTAL 1,141 1,057 8 1,997 SALES BY LOCATION OF CUSTOMER United Kingdom 508 504 1 889 United States of America 2,361 2,078 14 4,132 Continental Europe 1,398 1,273 10 2,446 Rest of the World 952 830 15 1,666 TOTAL 5,219 4,685 11 9,133 (A)The translation of pounds sterling into U.S. dollars has been made at $1.75 to 1 pound (the average rate for the year ended Dec. 31, 1992) solely for the convenience of the reader. (C) TAXATION The tax on profit on ordinary activities comprises: 1992 1991 1992 m pound m pound US$m(A) United Kingdom taxation 68 32 119 Overseas taxation (including associated undertakings) 292 297 511 360 329 630 (D) DIVIDENDS To the 'A' Shareholders of the Company Pence per Share m pound Interim dividends First - paid 2.075 28 Second - paid 2.075 28 Third - paid 2.075 29 Fourth - payable 2.375 32 8.600 117 To the holders of Equity Units through SmithKline Beecham Corporation Cents per Equity Unit m pound Interim dividends First - paid 4.877 36 Second - paid 5.279 36 Third - paid 4.503 36 Fourth - payable 4.605 42 19.264 150 (A) The translation of pounds sterling into U.S. dollars has been made at $1.75 to 1 pound (the average rate for the year ended Dec. 31, 1992) solely for the convenience of the reader.
SmithKline Beecham Notes
Dividends paid by SmithKline Beecham plc on the 'A' Shares are paid net and carry a tax credit for United Kingdom purposes, currently equal to one third of the cash dividend. Dividends on the Equity Units are paid gross by SmithKline Beecham Corporation in the United States. The gross equivalent paid by SmithKline Beecham plc is equal to the amount paid by SmithKline Beecham Corporation. The fourth interim dividend will be paid to holders of record on April 15, 1993. (E) EARNINGS PER SHARE 1992 1991 1992 (A) Profit attributable to shareholders 728m 638m $1,274m Average number of A and B Shares 2,666m 2,656m 2,666m Earnings per Share/Equity Unit 27.3p 24.0p 47.8c Earnings per Equity Unit ADR 136.5p 120.0p 238.9c Earnings per share have been computed to take into account the 2:1 split in the A shares and the 10:1 split in the Equity Units, which occurred on July 13, 1992. On the New York Stock Exchange five new Equity Units were combined to create the Equity Unit ADR. The 1991 comparatives have been restated. (F) ANNUAL REPORT The Annual Report and Accounts will be mailed to shareholders on March 26, 1993. (G) SUMMARY FINANCIAL INFORMATION The financial information for the year ended Dec. 31, 1991, has been extracted from the Statutory Accounts for that year which have been delivered to the Registrar of Companies. The Auditors' Report on these Accounts was unqualified and did not contain a statement under Section 237 of the Companies Act 1985. Statutory Accounts for the year ended Dec. 31, 1992, will be delivered to the Registrar of Companies following the Annual General Meeting on April 26, 1993. (A) The translation of pounds sterling into U.S. dollars has been made at $1.75 to 1 pound (the average rate for the year ended Dec. 31, 1992) solely for the convenience of the reader. /delval/ -0- 2/23/93 /CONTACT: Jeremy Heymsfeld, 215-751-5166, or Richard Williams (financial), 215-751-7002, both of SmithKline Beecham/ (SBH)
CO: SmithKline Beecham ST: Pennsylvania IN: MTC SU: ERN
MP-SF -- PH001 -- 9235 02/23/93 08:11 EST
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|Date:||Feb 23, 1993|
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