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SMITHKLINE BEECHAM ANNOUNCES THIRD QUARTER 1993 RESULTS: SALES INCREASE 20 PERCENT AND PRE-TAX PROFIT 9 PERCENT

 PHILADELPHIA and LONDON, Oct. 19 /PRNewswire/ -- SmithKline Beecham (NYSE: SKB) (SB) announced today that pre-tax profit in the third quarter ended Sept. 30, 1993, rose 9 percent from a year earlier on sales growth of 20 percent.
 Earnings per share were 11.3 cents/7.5 pence, up 12 percent.
 For the first nine months of the year, sales increased 25 percent and pre-tax profit 13 percent. Earnings per share were up 15 percent.
 Results for the third quarter include exceptional items relating to the sale of the personal care brands and subsequent fundamental restructuring of the company's Consumer Brands business, following the decision to focus on healthcare related products. In addition, results for the nine months include exceptional items arising from the sale in the second quarter of hair care brands.
 The profit on the disposals is 160 million pounds sterling and the cost of restructuring of the retained business is 109 million pounds.
 Earnings per share, excluding exceptional items, rose 12 percent for the third quarter and 13 percent for the nine-month period.
 At comparable rates of exchange, sales and operating profit from continuing operations for the third quarter rose 6 percent and 7 percent, respectively. For the nine months, sales were up 9 percent, and operating profit 9 percent.
 Commenting on the quarter, SB Chief Executive Robert P. Bauman said, "We turned in another solid performance that positions us to achieve our financial objectives for 1993. Highlighting the quarter was the continued strong performance of our new pharmaceutical products and the substantial growth of our Clinical Laboratories business.
 "Our formula for success amid changing markets remains the same. We continue to believe that leadership in research and development, effective worldwide marketing and increased productivity will ensure our place at the front rank of our industry."
 Bauman added, "We will continue our best efforts to help achieve the goal we share with governments around the world: effective, convenient, and soundly financed healthcare.
 "We are troubled, however, by proposals in the U.S. that could lead to large, costly bureaucracies and discourage the huge investments required to sustain advances in research and development. A workable reform plan will be one that enhances rather than encumbers the forces of the marketplace."
 The following business sector comparisons for the third quarter are made at comparable exchange rates:
 Pharmaceuticals
 Sales rose 2 percent for the quarter, in comparison with an exceptional 1992 third quarter. Growth resulted exclusively from increased volume. Operating profit increased 8 percent.
 In the United States, sales rose 1 percent in comparison with a strong 1992 third quarter, when Engerix B sales more than tripled. In Europe, sales were up 3 percent, with Germany up 1 percent and Italy down 21 percent, reflecting continuing government pressures on healthcare spending. In Spain, sales rose 18 percent, and in France, 7 percent.
 In the United States, Paxil, the antidepressant launched earlier in 1993, continued to perform very well during the third quarter, as did Relafen, the arthritis medication, which was successfully launched in 1992. In addition to Paxil/Seroxat and Relafen/Relifex, worldwide sales were bolstered by Kytril, the injectable anti-emetic for patients undergoing cancer therapy, and Havrix, the world's first hepatitis A vaccine.
 Together, these four new products accounted for 321 million pounds in sales during the first nine months of 1993, compared with 113 million pounds for the first nine months of 1992.
 Sales of Engerix B, the genetically engineered hepatitis B vaccine, were 15 percent below an exceptional quarter a year earlier, but were up 13 percent year-to-date.
 Augmentin, the broad-spectrum antibiotic, had sales growth of 4 percent. Strong European sales, up 10 percent, and excellent performance in developing markets were balanced by weaker U.S. performance where sales were down 5 percent against a strong quarter a year ago.
 Tagamet, the peptic ulcer medicine, was in line with expectations, as sales grew 2 percent for the quarter but fell 7 percent for the nine months.
 Havrix was recently awarded the 1993 UK Prix Galien medal, regarded as the Nobel prize of the pharmaceutical industry, following similar awards in France and Belgium. This was in recognition of innovative pharmaceutical product development. Havrix is now available in 26 markets worldwide.
 Animal Health
 Sales for the quarter, led by livestock vaccines, increased 4 percent, reflecting a focusing of marketing effort to the needs of individual customer groups. Operating profit grew 6 percent, as margins were helped by a more favorable product mix and increased manufacturing efficiencies.
 Late in the third quarter, SB acquired the Roche Animal Health packaged pharmaceutical products business from Hoffmann-La Roche, Inc. The acquisition expands the product line of the Animal Health business and strengthens its research and development pipeline. Also during the quarter, SB launched Leukocell 2, a vaccine for feline leukemia, in the United Kingdom, one of the major markets for this product.
 Consumer Brands
 SB's strategic refocusing on over-the-counter medicines, oral care products, and health-related drinks yielded growth in sales from continuing operations of 11 percent. Operating profit from continuing operations decreased 2 percent, reflecting increased advertising and promotional support for key healthcare brands and the retained overhead expenses from discontinued operations, which will be eliminated once the planned restructuring has been completed.
 Over-the-counter medicines had a sales increase of 13 percent for the third quarter, and the Tums antacid line in the United States reached a new high in market share of 46.8 percent.
 During the quarter, SB Consumer Brands representatives in the United States began to detail the nicotine gum Nicorette under a previously announced partnership with Marion Merrell Dow Inc. Both Nicorette and another Marion Merrell Dow smoking-cessation aid, Nicoderm (nicotine transdermal system), are candidates for switches from prescription to over-the counter status.
 An OTC version of cimetidine, the active ingredient in Tagamet, received preliminary approval from regulatory authorities in the United Kingdom. In the United States, discussions with the Food and Drug Administration about OTC cimetidine continue.
 Sales of oral care products continued strong worldwide, gaining 16 percent, with especially strong gains in the United Kingdom and Germany.
 Health-related drinks, including Ribena, Lucozade and Horlicks, had a 6 percent rise in sales for the quarter.
 Clinical Laboratories
 Emphasis on service contributed to strong growth in this market. Sales increased 15 per cent, acquisitions contributing 4 percent. The underlying sales gain resulted almost entirely from higher volumes due to increased market share in a continuing price sensitive environment.
 Operating profit rose 18 percent, as various cost-containment measures improved margins.
 Dividend
 SmithKline Beecham today declared a third-quarter dividend of 2.533 pence per A share, 4.718 cents per Equity Unit, and 23.590 cents per Equity Unit ADR (SBE). Payment will be made on Jan. 18, 1994, to holders of record on Dec. 3, 1993. An exchange rate of $1.4902 to 1 pound has been used, which was the opening exchange rate in London on Oct. 19, 1993.
 SmithKline Beecham -- one of the world's leading healthcare companies -- discovers, develops, manufactures, and markets human and animal pharmaceuticals, over-the-counter medicine, health-related consumer products and clinical laboratory services.
 SMITHKLINE BEECHAM
 Consolidated Profit and Loss Account
 Three months ended Sept. 30, 1993
 (Unaudited)
 1993 1992 1993
 Pounds Pounds Increase Dollars
 million million percent million(B)
 Sales:
 Continuing operations(C) 1,464 1,215 20 2,211
 Discontinued operations(C) 11 61 --- 16
 Total 1,475 1,276 16 2,227
 Cost of goods sold (495) (440) --- (748)
 Gross profit 980 836 17 1,479
 Selling, general and
 administrative expenses (560) (448) --- (845)
 Research and development
 expenditure (140) (118) --- (211)
 Trading profit:
 Continuing operations(C) 277 254 9 418
 Discontinued operations(C) 3 16 --- 5
 Exceptional items:
 Profit on disposal of
 discontinued operations(D) 123 --- --- 185
 Provision for
 reorganization of
 continuing operations(D) (109) --- --- (165)
 Share of profits of
 associated undertakings 2 2 --- 3
 Interest (5) (5) --- (7)
 Profit on ordinary activities
 before taxation 291 267 9 439
 Tax on profit on ordinary
 activities(E) (83) (84) --- (126)
 Profit on ordinary activities
 after taxation 208 183 14 313
 Minority interests (5) (2) --- (7)
 Auction Rate Preference
 Share dividends (2) (3) --- (3)
 Profit attributable
 to shareholders 201 178 13 303
 Dividends payable (76) (65) --- (114)
 Profit retained 125 113 --- 189
 SMITHKLINE BEECHAM
 Consolidated Profit and Loss Account
 Nine months ended Sept. 30, 1993
 (Unaudited)
 1993 1992 1993
 Pounds Pounds Increase Dollars
 million million percent million(B)
 Sales:
 Continuing operations(C) 4,380 3,518 25 6,614
 Discontinued operations(C) 124 225 --- 187
 Total 4,504 3,743 20 6,801
 Cost of goods sold (1,515) (1,293) --- (2,288)
 Gross profit 2,989 2,450 22 4,513
 Selling, general and
 administrative expenses (1,727) (1,325) --- (2,607)
 Research and development
 expenditure (410) (337) --- (619)
 Trading profit
 Continuing operations(C) 819 739 11 1,237
 Discontinued operations(C) 33 49 --- 50
 Exceptional items:
 Profit on disposal of
 discontinued operations(D) 160 54 --- 241
 Provision for
 reorganization of
 continuing operations(D) (109) (31) --- (165)
 Share of profits of
 associated undertakings 3 3 --- 5
 Interest (14) (26) --- (21)
 Profit on ordinary
 activities before taxation 892 788 13 1,347
 Tax on profit on
 ordinary activities(E) (277) (253) --- (419)
 Profit on ordinary
 activities after taxation 615 535 15 928
 Minority interests (10) (9) --- (15)
 Auction Rate Preference
 Share dividends (10) (11) --- (15)
 Profit attributable
 to shareholders 595 515 16 898
 Dividends payable (228) (193) --- (344)
 Profit retained 367 322 --- 554
 SMITHKLINE BEECHAM
 Consolidated Profit and Loss Account
 Earnings
 (Unaudited)
 1993 1992 1993
 Three months Pounds Pounds Increase Dollars
 ended Sept. 30, 1993 million million percent million(B)
 Profit attributable
 to shareholders 201 178 --- 303
 Exceptional items
 after tax (D) 1 --- --- 2
 Adjusted profit
 attributable to
 shareholders 202 178 --- 305
 Average number of
 A and B shares 2,674m 2,666m --- 2,674m
 Earnings per
 Share/Equity Unit 7.5p 6.7p 12 11.3c
 Earnings per
 Equity Unit ADR 37.5p 33.5p 12 56.6c
 Excluding exceptional
 items:
 Earnings per
 Share/Equity Unit 7.5p 6.7p 12 11.3c
 Earnings per Equity
 Unit ADR 37.5p 33.5p 12 56.6c
 1993 1992 1993
 Nine months Pounds Pounds Increase Dollars
 ended Sept. 30, 1993 million million percent million(B)
 Profit attributable
 to shareholders 595 515 --- 898
 Exceptional items
 after tax(D) (35) (23) --- (53)
 Adjusted profit
 attributable to
 shareholders 560 492 --- 845
 Average number of
 A and B shares 2,674m 2,666m --- 2,674m
 Earnings per
 Share/Equity Unit 22.2p 19.3p 15 33.5c
 Earnings per Equity
 Unit ADR 111.0p 96.5p 15 167.6c
 Excluding exceptional items:
 Earnings per
 Share/Equity Unit 20.9p 18.5p 13 31.6c
 Earnings per
 Equity Unit ADR 104.5p 92.5p 13 157.8c
 SMITHKLINE BEECHAM
 Summary Consolidated Balance Sheet
 Sept. 30, 1993 -- unaudited
 Sept. 30 Sept. 30 Sept. 30
 1993 1992 1993
 Pounds Pounds Dollars
 million million million(B)
 Fixed assets 1,971 1,707 2,957
 Current assets 3,435 3,052 5,153
 Creditors due within one year (2,056) (2,591) (3,084)
 Net current assets 1,379 461 2,069
 Creditors due after
 more than one year (1,599) (802) (2,399)
 Net assets 1,751 1,366 2,627
 SB shareholders' equity 1,185 874 1,778
 Auction Rate Preference
 Shares of subsidiary 533 471 800
 Minority interests 33 21 49
 Total shareholders' funds 1,751 1,366 2,627
 SMITHKLINE BEECHAM
 Summary Cash Flow Statement
 Nine months ended Sept. 30, 1993 -- unaudited
 Nine months ended 1993 1992 1993
 Sept. 30 Pounds Pounds Dollars
 million million million(B)
 Inflow from trading activities 1,094 819 1,652
 Net interest and dividends paid (242) (222) (365)
 Tax paid (262) (167) (396)
 Investing activities - purchases less
 sales of tangible fixed assets (229) (157) (346)
 Free cash flow 361 273 545
 Restructuring costs paid (36) (89) (54)
 Investing activities - other 107 (7) 161
 Net cash inflow 432 177 652
 Financing inflow (outflow) 809 (318) 1,222
 Increase(decrease) in cash and cash
 equivalents 1,241 (141) 1,874
 Total net funds (borrowings)
 At beginning of period (392) (502) (592)
 Exchange restatement (3) (91) (4)
 Net cash inflow 432 177 652
 Issue of share capital 20 13 30
 At end of period 57 (403) 86
 SMITHKLINE BEECHAM
 Notes On The Interim Financial Statements
 Three Months And Nine Months Ended Sept. 30, 1993
 (A) Basis of preparation
 The unaudited results for the nine months ended Sept. 30, 1993, have been prepared in accordance with UK generally accepted accounting principles ("GAAP"). 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 UK accounting standards:
 -- FRS3 "Reporting Financial Performance"
 The 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."
 -- 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 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 sterling 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".


Restatement of 1992 Results

The results for 1992 have been restated to take into account the changes in accounting policies noted above. In addition, following the strategic repositioning of the Consumer Brands business to focus on healthcare and the resultant disposal of the Personal Care businesses, which began in 1992, the results for 1992 have been restated to treat the results of the businesses disposed of as discontinued operations. The profit on disposal of Manetti Roberts and the North American men's personal care businesses has been treated as exceptional items as required by FRS 3 in the restated 1992 results. In addition, the provision made in 1992 for the initial costs of the fundamental restructuring of the continuing Consumer Brands business has also been shown as an exceptional item.
 The accounts for the nine months ended Sept. 30, 1992, reconcile to those originally published as follows:
 Consolidated Profit And Loss Account
 As published Adjustments Restated
 Pounds Pounds Pounds
 million million million
 Three months ended Sept. 30 1992
 Trading profit 275 (5) 270
 Exceptional items --- --- ---
 Profit on ordinary activities
 before taxation 272 (5) 267
 Tax on profit on
 ordinary activities (87) 3 (84)
 Profit on ordinary activities
 after taxation 185 (2) 183
 Nine months ended
 Sept. 30, 1992
 Trading profit 827 (39) 788
 Exceptional items --- 23 23
 Profit on ordinary activities
 before taxation 804 (16) 788
 Tax on profit on
 ordinary activities (260) 7 (253)
 Profit on ordinary activities
 after taxation 544 (9) 535
 Consolidated Balance Sheet
 Sept. 30, 1992
 As published Adjustments Restated
 Pounds Pounds Pounds
 million million million
 Current assets 2,942 110 3,052
 Creditors due after
 more than one year (527) (275) (802)
 SB shareholders' equity 1,039 (165) 874
 (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 nine months ended Sept. 30: $1.51 to 1 pound (the average rate for the nine months ended Sept. 30, 1993)
 Balance sheet: $1.50 to 1 pound (the rate applicable at Sept. 30, 1993).
 The profit and loss account dollar amounts for the three months ended Sept. 30 are calculated by deducting the six-month dollar translated amounts from the nine-month dollar translated amounts.
 (C) Segment Information:
 Three months 1993 1992 Increase/ 1993
 ended Sept. 30, 1993 Pounds Pounds (Decrease) Dollars
 million million percent million(B)
 Sales:
 Pharmaceuticals 821 709 16 1,240
 Animal Health 101 85 19 152
 Consumer Brands 342 277 24 517
 Clinical Laboratories 200 144 40 302
 Continuing operations 1,464 1,215 20 2,211
 Discontinued operations 11 61 --- 16
 Total 1,475 1,276 16 2,227
 Trading profit:
 Pharmaceuticals 189 171 11 286
 Animal Health 17 14 9 26
 Consumer Brands 51 52 (1) 77
 Clinical Laboratories 20 17 22 29
 Continuing operations 277 254 9 418
 Discontinued operations 3 16 --- 5
 Total 280 270 4 423
 Note: Percentage movements are calculated on unrounded amounts.
 (C) Segment Information:
 Nine months 1993 1992 Increase/ 1993
 ended Sept. 30, 1993 Pounds Pounds (Decrease) Dollars
 million million percent million(B)
 Sales:
 Pharmaceuticals 2,541 2,069 23 3,837
 Animal Health 287 235 22 433
 Consumer Brands 964 790 22 1,456
 Clinical Laboratories 588 424 39 888
 Continuing operations 4,380 3,518 25 6,614
 Discontinued operations 124 225 --- 187
 Total 4,504 3,743 20 6,801
 Trading profit
 Pharmaceuticals 611 543 13 923
 Animal Health 41 36 11 62
 Consumer Brands 109 112 (2) 165
 Clinical Laboratories 58 48 21 87
 Continuing operations 819 739 11 1,237
 Discontinued operations 33 49 --- 50
 Total 852 788 8 1,287
 Note: percentage movements are calculated on unrounded amounts.


(D) Exceptional items
 Three Months Nine Months
 Sept. 30 Sept. 30 Sept. 30 Sept. 30
 1993 1992 1993 1992
 Pounds Pounds Pounds Pounds
 million million million million
 Profit on disposal of
 personal care business 123 --- 123 ---
 Profit on disposal of
 hair care business --- --- 37 ---
 Profit on disposal of
 Manetti Roberts
 toiletries business --- --- --- 54
 Provision for
 reorganization of
 continuing operations (109) --- (109) (31)
 Total 14 --- 51 23
 Tax on exceptional items (15) --- (16) ---
 Total (1) --- 35 23
 (E) Taxation
 Taxation has been calculated on the basis of the estimated effective tax rate for the year ending Dec. 31, 1993. Following a review of the tax charge for the year, the estimated effective tax rate has been reduced to 31.0 percent compared to 32.3 percent used in the previous statements.
 (F) Shareholders' Report
 The Shareholders' Report for the third quarter will be posted to shareholders on Nov. 2, 1993.
 SMITHKLINE BEECHAM
 (for US only)
 $ (Millions)


Third Quarter ended Sept. 30, 1993
 3rd Qtr '93 3rd Qtr '92 Pct.
 Ended 9/30 Ended 9/30 Change
 Sales $2,227 $1,927 16
 Net Income $303 $269 13
 Earnings per Equity Unit ADR $0.57 $0.51 12


Nine months ended Sept. 30, 1993
 Nine Nine
 Months '93 Months '92 Pct.
 Ended 9/30 Ended 9/30 Change
 Sales $6,801 $5,652 20
 Net Income $898 $778 16
 Earnings per Equity Unit ADR $1.68 $1.46 15
 For convenience purposes, the exchange rate used for reported pounds sterling for the nine months ended Sept. 30, 1993 and Sept. 30, 1992, is the average rate for the nine months ended Sept. 30, 1993, 1 pound = $1.51. The third quarter amounts are calculated by deducting the six month translated amounts from the nine month translated amounts.
 /delval/
 -0- 10/19/93
 /CONTACT: Jeremy Heymsfeld, 215-751-5166, or Richard Williams (financial), 215-751-7002, of SmithKline Beecham/
 (SBH)


CO: SmithKline Beecham ST: Pennsylvania IN: MTC SU: ERN

MP-JR -- PH001 -- 3745 10/19/93 08:30 EDT
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