Financial review
The purpose of this section of the Directors’ Report is to provide a balanced and comprehensive analysis, including the key business factors and trends, of the financial performance of the business during 2007, the financial position as at the end of the year and the main business factors and trends which could affect the future financial performance of the business.
“In 2007, excluding the costs of the restructuring and synergy programmes, earnings per share grew by 7% to $4.20. The momentum in sales and profit growth established in recent years was maintained despite the introduction of generic competition to Toprol-XL in the US. In addition, our strong cash generation allowed us to return almost $7 billion to our shareholders in dividends and share re-purchases.
At the same time, we took significant steps to secure and widen the platform from which continued strong performance in the future can be launched. We acquired and began integrating the leading biologics company, MedImmune, adding to our launched product portfolio, increasing our development pipeline and extending our research and development capabilities beyond small molecules to include monoclonal antibodies and vaccines. Secure medium- and long-term debt programmes have been established from which a significant portion of the financing for the acquisition of MedImmune was drawn, whilst short-term cash and borrowing facilities for our immediate commitments to our shareholders and third parties have been put in place. Restructuring initiatives, first introduced in manufacturing at the beginning of the year, have been extended to all areas and include synergy opportunities arising from the acquisition of MedImmune. These initiatives are anticipated to deliver annual benefits of $1,400 million from 2010.
These steps will allow for further increases in investment in research and development to strengthen and realise the pipeline, selective geographical expansion and focused exploitation of our existing products whilst continuing to generate attractive returns for our shareholders.”
SIMON LOWTH
Chief Financial Officer
