Notes 1-5
- 1 Operating profit
- 2 Restructuring and synergy costs
- 3 Finance income and expense
- 4 Taxation
- 5 Earnings per $0.25 Ordinary Share
2 RESTRUCTURING AND SYNERGY COSTS
During 2007, Senior Executive Team-approved restructuring and synergy programmes were announced. The tables below show the costs that have been charged in respect of these programmes to the income statement by cost categorisation and type. Severance provisions are detailed in Note 19.
| 2007 $m |
|
|---|---|
| Cost of sales | 415 |
| Research and development | 73 |
| Selling, general and administrative expenses | 478 |
| Total charge | 966 |
| 2007 $m |
|
| Severance costs | 678 |
| Accelerated depreciation and impairment | 203 |
| Other | 85 |
| Total charge | 966 |
The total charge in respect of the Global Supply Chain productivity initiative is anticipated to be around $750m.
In aggregate, research and development restructuring costs of around $100m are expected.
A strategic review of the sales and marketing resources required in Europe for the next three years has been undertaken. The total costs of restructuring have been estimated at approximately $300m. Total costs of the programmes to improve IS and Business Support productivity and strategic sourcing are expected to amount to around $450m.
In addition, synergy programmes with respect to the integration of MedImmune have been initiated. Total costs of $375m are anticipated.
The Company expects the majority of the programmes to be substantially completed by the end of 2009. The Company will continue to look for further initiatives to improve the long-term efficiency of the business.
