Interim Results - Part 3

ASTRAZENECA PLC 3 August 1999 Part 3 Notes to the Interim Financial Statements 1 BASIS OF PREPARATION AND ACCOUNTING POLICIES The interim financial statements have been prepared using the merger method of accounting in relation to the merger of Zeneca Group PLC and Astra AB which became effective on 5 April 1999. Under merger accounting, the results and cash flows of Zeneca Group PLC and Astra AB are combined from the beginning of the financial period in which the merger occurred and their assets and liabilities combined at the amounts at which they were previously recorded after adjusting to achieve consistency of accounting policies. Profit and loss account, balance sheet and cash flow comparatives are restated on the combined basis. Following completion of the merger, as the US dollar is considered to be the most significant currency exposure, these and all subsequent financial statements will be presented in US dollars. Translations of key information into sterling and Swedish Kronor are provided on page 24. AstraZeneca PLC's share capital has been redenominated from sterling into US dollars. The unaudited results for the six months ended 30 June 1999 have been prepared in accordance with UK generally accepted accounting principles. The accounting policies applied are those set out in AstraZeneca PLC's (formerly Zeneca Group PLC) 1998 Annual Report and Form 20-F except that during the period under review AstraZeneca adopted Financial Reporting Standard No. 12 'Provisions, Contingent Liabilities and Contingent Assets' (FRS 12). The adoption of FRS 12 had no impact on the Group's net assets at 1 January 1999. The statements are unaudited but have been reviewed by the auditors and their report is set out above. The statements do not comprise the statutory accounts of the group. Statutory accounts for Zeneca Group PLC for the year ended 31 December 1998 have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain any statement under Section 237 of the Companies Act 1985. 2 BASIS OF PRO FORMA FIGURES In addition to merging the historical results of Astra and Zeneca under UK GAAP, as required for statutory reporting, the unaudited pro forma profit and loss figures for 1998 and 1999 include two further adjustments to the statutory figures to illustrate the effect on the sales and profits as if the Astra Merck Restructuring and the merger related payments to Merck had occurred at the beginning of 1998 (rather than July 1998 and April 1999 respectively). The pro forma figures incorporate sales of USD1,715m for the first six months of 1998 related to the Astra Merck joint venture which are excluded from the statutory consolidation. Changes in the cost base which arise from the Astra Merck restructuring have also been back dated six months to 1 January 1998. The net effect of these pro forma adjustments is to reduce first half 1998 reported profits by USD55m, before tax relief of USD23m. A pro forma amortisation cost of USD12m per quarter has also been provided from 1 January 1998 to 5 April 1999, and notional interest cost of USD21m per quarter on the payments due to Merck on completion of the Merger. These charges are offset by tax relief of USD6m per quarter. Further details on the basis of the pro forma adjustments are included in the Merger Document and AstraZeneca's Circular to Shareholders relating to the Merger, both dated 21 January 1999, and in AstraZeneca's Registration Statement on Form F-4 filed with the US Securities and Exchange Commission. 3 JOINT VENTURES AND ASSOCIATES The Group's share of joint ventures' sales for the half year to 30 June 1999 amounted to USD168m and USD1,871m for the comparative period. Share of joint ventures' and associates' operating profits for the half year to 30 June 1999 amounted to USD22m and USD1m respectively, and for the comparative period USD560m and USD1m, respectively. Prior to 1 July 1998, the operations of Astra Merck, Inc. were accounted for as a joint venture. 4 EXCEPTIONAL ITEMS 1st 1st Half Half 1999 1998 USDm USDm -------------------------------- ----- ----- Integration and synergy costs (130) - Astra Pharmaceuticals L.P. restructuring costs (12) - -------------------------------- ----- ----- Exceptional items included in operating profits (142) - -------------------------------- ----- ----- Gain on disposal of Specialties business (after charging USD406m of goodwill previously written off to reserves) 237 - Loss on closure of organophosphate intermediates business - (46) -------------------------------- ----- ----- Profit less losses on sale and closure of operations 237 (46) -------------------------------- ----- ----- Merck 'Trigger Event' payment (713) - Other merger costs (204) - -------------------------------- ----- ----- Merger costs (917) - -------------------------------- ----- ----- Total exceptional items before taxation (822) (46) Net taxation credit 141 12 -------------------------------- ----- ----- (681) (34) -------------------------------- ----- ----- 5 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 30 June 30 June 1999 1998 USDm USDm -------------------------------- ----- ----- Shareholders' funds at beginning of period 10,929 9,552 -------------------------------- ----- ----- Net profit for the period 832 1,440 Dividends (408) (220) -------------------------------- ----- ----- 424 1,220 Issue of AstraZeneca PLC Ordinary Shares 11 6 Foreign currency adjustments (496) 2 Goodwill realised 420 - Minority interest buy out (137) - Other movements (6) 2 -------------------------------- ----- ----- Net addition to Shareholders' funds 216 1,230 -------------------------------- ----- ----- Shareholders' funds at end of period 11,145 10,782 -------------------------------- ----- ----- 6 NET CASH FUNDS The table below provides an analysis of net cash funds and a reconciliation of net cash flow to movement in net cash funds. At 31 Dec Cash Acquisitions Exchange At 30 June 1998 flow and disposals movements 1999 USDm USDm USDm USDm USDm ----------------- ----- ----- ----- ----- ----- Loans due after 1 year (761) (4) - 16 (749) Current instalments of loans (30) 1 - 2 (27) Finance leases (20) 4 12 1 (3) ----------------- ----- ----- ----- ----- ----- Total loans and lease finance (811) 1 12 19 (779) ----------------- ----- ----- ----- ----- ----- Short-term investments 274 1,011 - (36) 1,249 Cash 3,138 (983) - (140) 2,015 Overdrafts (240) (5) - 13 (232) Short-term borrowings, excluding overdrafts (107) (311) - (1) (419) ----------------- ----- ----- ----- ----- ----- 3,065 (288) - (164) 2,613 ----------------- ----- ----- ----- ----- ----- Net cash funds 2,254 (287) 12 (145) 1,834 ----------------- ----- ----- ----- ----- ----- Issue of shares (11) Issue of shares by subsidiaries to minorities (3) ----------------- ----- ----- ----- ----- ----- Net cash outflow before management of liquid resources and financing (301) ----------------- ----- ----- ----- ----- ----- 7 SEGMENT ANALYSIS 1st 1st 2nd 2nd 1st 1st Quarter Quarter Quarter Quarter Half Half 1999 1998 1999 1998 1999 1998 USDm USDm USDm USDm USDm USDm ------------------ ----- ----- ----- ----- ----- ----- Geographical analysis of sales by customer location United Kingdom 246 214 282 258 528 472 Continental Europe 1,500 1,253 1,410 1,258 2,910 2,511 The Americas 2,146 1,160 2,528 1,425 4,674 2,585 Asia, Africa and Australasia 422 375 509 438 931 813 ------------------ ----- ----- ----- ----- ----- ----- Continuing Operations 4,314 3,002 4,729 3,379 9,043 6,381 ------------------ ----- ----- ----- ----- ----- ----- Sales by class of business Healthcare 3,630 2,297 3,752 2,348 7,382 4,645 ------------------------------------------------------------------------ Pharmaceuticals 3,570 2,246 3,694 2,297 7,264 4,543 Salick Health Care 60 51 58 51 118 102 ------------------------------------------------------------------------ Agrochemicals 663 684 949 1,009 1,612 1,693 Other trading 21 21 28 22 49 43 ------------------ ----- ----- ----- ----- ----- ----- Continuing operations 4,314 3,002 4,729 3,379 9,043 6,381 ------------------ ----- ----- ----- ----- ----- ----- Operating profit/ (loss) before exceptional items Healthcare 880 600 954 530 1,834 1,130 ------------------------------------------------------------------------ Pharmaceuticals 883 600 955 533 1,838 1,133 Salick Health Care (3) - (1) (3) (4) (3) ------------------------------------------------------------------------ Agrochemicals 71 83 212 253 283 336 Other trading (3) (8) (11) - (14) (8) ------------------ ----- ----- ----- ----- ----- ----- Continuing operations 948 675 1,155 783 2,103 1,458 ------------------ ----- ----- ----- ----- ----- ----- Operating profit/ (loss) before exceptional items as a percentage of sales % % % % % % ------------------ ----- ----- ----- ----- ----- ----- Healthcare 24.2 26.1 25.4 22.6 24.8 24.3 ------------------------------------------------------------------------ Pharmaceuticals 24.7 26.7 25.9 23.2 25.3 24.9 Salick Health Care (5.0) - (1.7) (5.9) (3.4) (2.9) ------------------------------------------------------------------------ Agrochemicals 10.7 12.1 22.3 25.1 17.6 19.8 ------------------ ----- ----- ----- ----- ----- ----- Continuing operations 22.0 22.5 24.4 23.2 23.3 22.8 ------------------ ----- ----- ----- ----- ----- ----- 8 PRODUCTS AND TERRITORIAL SEGMENT SALES ANALYSIS 1st 1st Pro Forma Pro Forma Half Half % Growth % Growth 1999 1998 Constant Pharmaceuticals USDm USDm Currency -------------------------------- ----- ----- ----- ----- Product Analysis Gastrointestinal: Losec 2,848 834 +15 +15 Others 24 21 +14 +14 -------------------------------- ----- ----- ----- ----- Total Gastrointestinal 2,872 855 +15 +15 -------------------------------- ----- ----- ----- ----- Cardiovascular: Zestril 602 511 +18 +18 Tenormin 247 245 +1 +1 Seloken 257 205 +25 +24 Plendil 216 122 +11 +10 Imdur 59 55 +7 +7 Ramace 35 31 +13 +13 Atacand 73 12 n/m* n/m Others 181 161 +7 +6 -------------------------------- ----- ----- ----- ----- Total Cardiovascular 1,670 1,342 +17 +17 -------------------------------- ----- ----- ----- ----- Respiratory: Pulmicort 370 338 +9 +9 Accolate 74 74 - - Rhinocort 99 80 +24 +24 Bricanyl 73 78 -6 -6 Oxis 41 17 n/m n/m Others 29 29 - +3 -------------------------------- ----- ----- ----- ----- Total Respiratory 686 616 +11 +11 -------------------------------- ----- ----- ----- ----- Oncology: Zoladex 331 301 +10 +9 Nolvadex 287 264 +9 +8 Casodex 166 116 +43 +44 Arimidex 63 58 +9 +9 Tomudex 12 8 +50 +50 -------------------------------- ----- ----- ----- ----- Total Oncology 859 747 +15 +14 -------------------------------- ----- ----- ----- ----- Specialist/Hospital: Diprivan 327 323 +1 +2 Xylocaine 128 116 +10 +7 Marcaine 42 40 +5 +5 Naropin 22 13 +69 +69 Zomig 86 32 n/m n/m Seroquel 95 19 n/m n/m Merrem 77 65 +18 +26 Other Products 345 327 +6 +7 Astra Tech 55 48 +15 +17 -------------------------------- ----- ----- ----- ----- Total Specialist/Hospital 1,177 983 +20 +21 -------------------------------- ----- ----- ----- ----- Total Pharmaceuticals 7,264 4,543 +16 +16 -------------------------------- ----- ----- ----- ----- * n/m = not meaningful 8 PRODUCTS AND TERRITORIAL SEGMENT SALES ANALYSIS (CONTINUED) 1st 1st Pro Forma Pro Forma Half Half % Growth % Growth 1999 1998 Constant Pharmaceuticals USDm USDm Currency -------------------------------- ----- ----- ----- ----- Territorial Analysis US 3,470 1,240 +17 +17 Japan 304 261 +16 +5 France 423 334 +27 +26 Germany 449 417 +8 +7 Italy 317 255 +24 +23 Sweden 184 178 +3 +7 UK 392 366 +7 +9 Rest of World 1,725 1,492 +16 +18 -------------------------------- ----- ----- ----- ----- 7,264 4,543 +16 +16 -------------------------------- ----- ----- ----- ----- Pro Forma % growth has been calculated as if the Astra Merck restructuring had occurred on 1 January 1998. Constant currency % growth has been calculated excluding the effects arising from exchange rate movements. 1st 1st Half Half % Growth % Growth 1999 1998 Constant Agrochemicals USDm USDm Currency -------------------------------- ----- ----- ----- ----- Product Analysis Herbicides: Non-Selective 369 369 - - Selective 490 606 -19 -19 -------------------------------- ----- ----- ----- ----- Total Herbicides 859 975 -12 -12 Insecticides 230 263 -13 -13 Fungicides 475 405 +17 +16 Others 48 50 -4 -8 -------------------------------- ----- ----- ----- ----- Total Agrochemicals 1,612 1,693 -5 -5 -------------------------------- ----- ----- ----- ----- Territorial Analysis North America 576 679 -15 -15 Latin America 165 209 -21 -21 Europe 633 600 +6 +5 Asia, Africa, Australasia 238 205 +16 +14 -------------------------------- ----- ----- ----- ----- 1,612 1,693 -5 -5 -------------------------------- ----- ----- ----- ----- Constant currency % growth has been calculated excluding the effects arising from exchange rate movements. 8 PRODUCTS AND TERRITORIAL SEGMENT SALES ANALYSIS (CONTINUED) 1st 1st Pro Forma 2nd 2nd Pro Forma Quarter Quarter % Growth Quarter Quarter % Growth 1999 1998 Constant 1999 1998 Constant Pharmaceuticals USDm USDm Currency USDm USDm Currency ------------------ ----- ----- ----- ----- ----- ----- Product Analysis Gastrointestinal: Losec 1,414 404 +24 1,434 430 +9 Others 12 11 +9 12 10 +20 ------------------ ----- ----- ----- ----- ----- ----- Total Gastrointestinal 1,426 415 +24 1,446 440 +9 ------------------ ----- ----- ----- ----- ----- ----- Cardiovascular: Zestril 301 255 +17 301 256 +19 Tenormin 124 121 - 123 124 +1 Seloken 112 91 +21 145 114 +27 Plendil 108 59 +14 108 63 +6 Imdur 32 27 +19 27 28 -4 Ramace 18 15 +13 17 16 +12 Atacand 32 5 n/m 41 7 n/m Others 88 79 +8 93 82 +5 ------------------ ----- ----- ----- ----- ----- ----- Total Cardiovascular 815 652 +16 855 690 +17 ------------------ ----- ----- ----- ----- ----- ----- Respiratory: Pulmicort 190 173 +8 180 165 +11 Accolate 28 33 -15 46 41 +12 Rhinocort 43 32 +31 56 48 +19 Bricanyl 38 37 - 35 41 -13 Oxis 20 7 n/m 21 10 n/m Others 17 16 +6 12 13 - ------------------ ----- ----- ----- ----- ----- ----- Total Respiratory 336 298 +11 350 318 +12 ------------------ ----- ----- ----- ----- ----- ----- Oncology: Zoladex 165 150 +9 166 151 +10 Nolvadex 143 136 +4 144 128 +11 Casodex 91 66 +38 75 50 +52 Arimidex 27 35 -23 36 23 +57 Tomudex 7 3 +100 5 5 +20 ------------------ ----- ----- ----- ----- ----- ----- Total Oncology 433 390 +10 426 357 +19 ------------------ ----- ----- ----- ----- ----- ----- Specialist/ Hospital: Diprivan 149 170 -13 178 153 +17 Xylocaine 61 56 +5 67 60 +10 Marcaine 20 19 +5 22 21 +5 Naropin 10 6 +67 12 7 +71 Zomig 39 12 n/m 47 20 n/m Seroquel 47 7 n/m 48 12 n/m Merrem 38 33 +18 39 32 +35 Other Products 169 164 +5 176 163 +8 Astra Tech 27 24 +9 28 24 +25 ------------------ ----- ----- ----- ----- ----- ----- Total Specialist/ Hospital 560 491 +14 617 492 +27 ------------------ ----- ----- ----- ----- ----- ----- Total Pharmaceuticals 3,570 2,246 +17 3,694 2,297 +15 ------------------ ----- ----- ----- ----- ----- ----- n/m = not meaningful 8 PRODUCTS AND TERRITORIAL SEGMENT SALES ANALYSIS (CONTINUED) 1st 1st Pro Forma 2nd 2nd Pro Forma Quarter Quarter % Growth Quarter Quarter % Growth 1999 1998 Constant 1999 1998 Constant Pharmaceuticals USDm USDm Currency USDm USDm Currency ---------------- ----- ----- ----- ----- ----- ----- Territorial Analysis US 1,679 649 +18 1,791 591 +16 Japan 127 111 +5 177 150 +6 France 211 160 +26 212 174 +25 Germany 249 208 +15 200 209 -2 Italy 160 126 +21 157 129 +25 Sweden 98 92 +9 86 86 +6 UK 193 174 +12 199 192 +7 Rest of World 853 726 +18 872 766 +17 ---------------- ----- ----- ----- ----- ----- ----- 3,570 2,246 +17 3,694 2,297 +15 ---------------- ----- ----- ----- ----- ----- ----- Pro Forma constant currency % growth has been calculated as if the Astra Merck restructuring had occurred on 1 January 1998 and excluding the effects arising from exchange rate movements. 1st 1st 2nd 2nd Quarter Quarter % Growth Quarter Quarter % Growth 1999 1998 Constant 1999 1998 Constant Agrochemicals USDm USDm Currency USDm USDm Currency ------------------ ----- ----- ----- ----- ----- ----- Product Analysis Herbicides: Non-Selective 146 155 -8 223 214 +5 Selective 193 223 -13 297 383 -21 ------------------ ----- ----- ----- ----- ----- ----- Total Herbicides 339 378 -11 520 597 -12 Insecticides 100 103 -4 130 160 -19 Fungicides 203 170 +15 272 235 +17 Others 21 33 -36 27 17 +47 ------------------ ----- ----- ----- ----- ----- ----- Total Agrochemicals 663 684 -5 949 1,009 -6 ------------------ ----- ----- ----- ----- ----- ----- Territorial Analysis North America 171 199 -13 405 480 -16 Latin America 63 93 -32 102 116 -12 Europe 311 293 +3 322 307 +7 Asia, Africa, Australasia 118 99 +18 120 106 +10 ------------------ ----- ----- ----- ----- ----- ----- 663 684 -5 949 1,009 -6 ------------------ ----- ----- ----- ----- ----- ----- Constant currency % growth has been calculated excluding the effects arising from exchange rate movements. 9 CONSOLIDATED PROFIT & LOSS ACCOUNT FOR CONTINUING OPERATIONS BEFORE EXCEPTIONAL ITEMS First Quarter Second Quarter 1999 1998 1999 1998 USDm USDm USDm USDm ------------------------------------ ----- ----- ----- ----- Sales 4,314 3,002 4,729 3,379 Cost of sales (1,316) (860) (1,452) (1,001) Distribution costs (86) (78) (81) (80) Research and development (636) (516) (676) (597) Selling, general and administrative expenses (1,368) (925) (1,410) (954) Other income 40 52 45 36 ------------------------------------ ----- ----- ----- ----- Group operating profit 948 675 1,155 783 Share of joint ventures' and associates' operating profits 19 254 3 305 Net interest 4 26 (37) 12 ------------------------------------ ----- ----- ----- ----- Profit on ordinary activities before taxation 971 955 1,121 1,100 Taxation (293) (284) (331) (352) ------------------------------------ ----- ----- ----- ----- Profit on ordinary activities after taxation 678 671 790 748 Attributable to minorities - 5 (2) (2) ------------------------------------ ----- ----- ----- ----- Net profit for the period 678 676 788 746 ------------------------------------ ----- ----- ----- ----- Earnings per Ordinary Share USD0.39 USD0.38 USD0.44 USD0.42 Diluted earnings per Ordinary Share USD0.39 USD0.38 USD0.44 USD0.42 ------------------------------------ ----- ----- ----- ----- Weighted average number of Ordinary Shares in issue (millions) 1,776 1,778 1,776 1,778 ------------------------------------ ----- ----- ----- ----- Diluted average number of Ordinary Shares in issue (millions) 1,780 1,782 1,780 1,782 ------------------------------------ ----- ----- ----- ----- Information for US Investors RECONCILIATION TO UNITED STATES ACCOUNTING PRINCIPLES The Group profit and loss account and Group balance sheet set out on pages 8, 10 and 11 are prepared in accordance with generally accepted accounting principles in the United Kingdom (UK GAAP) which differ in certain material respects from those generally accepted in the United States (US GAAP). For the purposes of US GAAP, the merger has been regarded as a purchase accounting acquisition of Astra by Zeneca. Under purchase accounting, the cost of the investment is calculated at the market value of the shares issued together with other incidental costs and the assets and liabilities of the acquired entity are recorded at fair value. As a result of the fair value exercise, increases in the values of Astra's tangible fixed assets and inventory were recognised and values attributed to their in-process research and development, existing products and assembled work force, together with appropriate deferred taxation effects. The difference between the cost of investment and the fair value of the assets and liabilities of Astra has been recorded as goodwill. The in-process research and development and inventory step up have been taken as a one off charge to net income, together with additional amortisation and depreciation arising as a result of the fair value exercise. Pre-acquisition results of Astra are deducted from net income. Other differences as they apply to AstraZeneca PLC (formerly Zeneca Group PLC) are explained in the Group's 1998 Annual Report and Form 20-F. The approximate effects on Group income and shareholders' equity of the GAAP differences are shown below. 1st 1st Half Half 1999 1998 Income attributable to Shareholders USDm USDm ------------------------------------ ----- ----- Net income for the period under UK GAAP 832 1,440 Pre-acquisition results of Astra (413) (732) ------------------------------------ ----- Previously presented Zeneca Group PLC income 708 Adjustments to conform to US GAAP Purchase accounting adjustments, (including goodwill and intangibles): - deemed acquisition of Astra - in-process research and development (3,315) - - inventory step-up (826) - - amortisation and other acquisition adjustments (299) - - others (42) (48) Divestment of Specialties business 253 - Capitalisation, less disposals and amortisation of interest - 2 Deferred taxation 388 - Pension expense (64) (28) Post-retirement benefits/plan amendment 2 2 Unrealised losses on foreign exchange 2 - ------------------------------------ ----- ----- Net income/(loss) in accordance with US GAAP (3,482) 636 ------------------------------------ ----- ----- Net income/(loss) from continuing operations (3,898) 632 Net income from discontinued operations 23 4 Gain on disposal of Specialties business 393 - ------------------------------------ ----- ----- Net income/(loss) per Ordinary Share under US GAAP (basic) USD(1.96) USD0.67 Net income/(loss) per Ordinary Share under US GAAP (diluted) USD(1.96) USD0.67 ------------------------------------ ----- ----- Net income from continuing operations in accordance with US GAAP is depressed by one off charges of USD3,315m to write off acquired in process research and development and USD826m (USD485m after tax relief of USD341m) for the step up in inventory values at acquisition. RECONCILIATION TO UNITED STATES ACCOUNTING PRINCIPLES (CONTINUED) 30 June 31 Dec 1999 1998 Shareholders' equity USDm USDm ------------------------------------ ----- ----- Shareholders' equity under UK GAAP 11,145 10,929 Assets of Astra before acquisition (6,757) ------------------------------------ ----- Previously presented Zeneca Group PLC Shareholders' equity 4,172 Adjustments to conform to US GAAP Purchase accounting adjustments, (including goodwill and intangibles): - deemed acquisition of Astra - goodwill 14,347 - - tangible and intangible fixed assets 11,833 - - others 865 1,157 Capitalisation, less disposals and amortisation of interest 146 181 Deferred taxation - on fair value of Astra (3,358) - - others (371) (111) Dividend 408 442 Pension expense (271) (241) Post-retirement benefits/plan amendment (33) (42) Others 60 - ------------------------------------ ----- ----- Shareholders' equity in accordance with US GAAP 34,771 5,558 ------------------------------------ ----- ----- Translation of key financial information For the six months 1999 1998 1999 1998 1999 1998 ended 30 June USDm USDm GBPm GBPm SEKm SEKm -------------------- ----- ----- ----- ----- ----- ----- Total Sales 9,658 7,053 6,132 4,478 81,629 59,612 Continuing operations 9,043 6,381 5,741 4,051 76,341 53,932 Pharmaceuticals 7,264 4,543 4,612 2,884 61,395 38,397 -------------------- ----- ----- ----- ----- ----- ----- Operating profit before exceptional items (EI) 2,174 1,536 1,380 975 18,375 12,982 Continuing operations before EI 2,103 1,458 1,335 926 17,775 12,323 Pharmaceuticals before EI 1,838 1,133 1,167 719 15,535 9,576 -------------------- ----- ----- ----- ----- ----- ----- Profit before tax on continuing operations before EI 2,092 2,055 1,328 1,305 17,682 17,369 -------------------- ----- ----- ----- ----- ----- ----- Net profit for the period 832 1,440 528 914 7,032 12,171 -------------------- ----- ----- ----- ----- ----- ----- Basic earnings per Ordinary Share USD0.47 USD0.81 29.8p 51.4p SEK3.97 SEK6.85 Earnings per Ordinary Share before EI USD0.85 USD0.83 54.0p 52.7p SEK7.18 SEK7.02 -------------------- ----- ----- ----- ----- ----- ----- Dividend per Ordinary Share USD0.23 USD0.23 14.2p 14.0p SEK1.89 SEK1.82 -------------------- ----- ----- ----- ----- ----- ----- Net cash inflow from operating activities 980 1,051 622 667 8,283 8,883 Decrease in cash in the period (988) (152) (627) (97) (8,351) (1,285) -------------------- ----- ----- ----- ----- ----- ----- Shareholders' funds - equity 30 June 1999/31 December 1998 11,145 10,929 7,076 6,939 94,198 92,372 -------------------- ----- ----- ----- ----- ----- ----- Sterling (GBP) and Swedish Kronor equivalents are shown for convenience and have been calculated using the current period end rates of USD1=GBP0.6349 and USD1=SEK8.4520, respectively. Dividend per Ordinary Share is shown as the actual amount payable using the rates at the date of declaration of the dividend. Shareholder Information ANNOUNCEMENTS AND MEETINGS ---------------------------------------------------------------------------- Announcement of third quarter and nine months results 3 November 1999 Preliminary announcement of full year results and announcement of second interim dividend 24 February 2000 Annual General Meeting 26 May 2000 (Provisional) DIVIDENDS ---------------------------------------------------------------------------- The Board has declared a first interim dividend of 0.23 dollars, 14.2 pence, 1.89 SEK per Ordinary Share in respect of the year 1999 using a conversion rate of US dollars to pounds sterling of 1 : 0.6194 and US dollars to Swedish Kronor of 1 : 8.2044. In 1998 Zeneca Group PLC declared a first interim dividend of 14 pence per Ordinary Share (equivalent to 0.23 dollars, 1.82 SEK at the exchange rates on the day of declaration). Astra AB did not declare interim dividends. Following the abolition of United Kingdom Advance Corporation Tax (ACT) with effect from 6 April 1999, private individuals or corporate shareholders owning less than 10% of the voting power of AstraZeneca resident in Sweden or the US will be entitled to a tax credit of one ninth of the dividend (10% of the gross dividend) although in practice the tax credit will be nullified by withholding tax. Each shareholder should consult their tax adviser for advice on the tax consequences of the dividend in their particular situation. The record date for the first interim dividend payable on 25 October 1999 (in the UK, Sweden and the US) is 10 September 1999. Ordinary Shares will trade ex-dividend on the London Stock Exchange from 6 September 1999 and on the Stockholm Stock Exchange from 8 September 1999. ADSs will trade ex-dividend on the New York Stock Exchange from 8 September 1999. Future dividends will normally be paid as follows: First interim Announced in early August and paid in late October. Second interim Announced in February and paid in late April. TRADEMARKS ---------------------------------------------------------------------------- All product or brand names included in Note 8 of this Interim Statement and the following names are trademarks of, or licensed to, AstraZeneca PLC or its subsidiary companies: Achieve Amistar Bravo Flex Force Fusilade Karate Prilosec Surpass Touchdown For simplicity, sales are reported under the above lead brand names, whereas some compounds are sold under several brand names to address separate market niches. ADDRESSES FOR CORRESPONDENCE ---------------------------------------------------------------------------- Registrar and Depositary Registered Office Swedish Securities Transfer Office for ADRs Register Centre The AstraZeneca Morgan Guaranty 15 Stanhope Gate Vardepapperscentralen Registrar Trust Company London VPC AB Lloyds TSB of New York W1Y 6LN Box 7822 Registrars 60 Wall Street S-103 97 Stockholm The Causeway New York Sweden Worthing New York 10260 West Sussex BN99 6DA Tel: (01903) Tel: (212) Tel: (0171) Tel: (8) 502 541 648 3208 304 5000 402 9100 Cautionary statement regarding forward-looking statements In order to utilise the 'Safe Harbour' provisions of the United States Private Securities Litigation Reform Act of 1995, AstraZeneca is providing the following cautionary statement. This Interim Report contains certain forward-looking statements about AstraZeneca. We intend to identify the forward-looking statements in this Interim Report, by using the words 'anticipates,' 'believes,' 'expects,' 'intends,' and similar expressions in such statements. Although we believe our expectations are based on reasonable assumptions, our forward-looking statements are subject to numerous risks and uncertainties and factors that could cause actual outcomes and results to be materially different from those projected or implied. Important factors that could cause actual results to differ materially from those in our forward-looking statements, certain of which are beyond our control, include, among other things: risk of loss or expiration of patents or trademarks (in particular, the expiration in the near future of patents covering Losec and Zestril); the difficulty of integrating Zeneca's and Astra's large and complex businesses on a timely basis and realizing synergies; the risk that R&D will not yield new products that achieve commercial success; the impact of competition, price controls and price reductions; the difficulties of obtaining governmental regulatory approvals for new products; the risk of substantial product liability claims; exposure to fluctuations in exchange rates for foreign currencies; exposure to US environmental liabilities and the impact on the Agrochemicals business from the growing importance to agriculture of biotechnology and the use of genetically modified crops. No assurances can be given that any of the events anticipated by our forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations and financial condition of AstraZeneca.

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