AstraZeneca Annual Report and Form 20-F Information 2008

“In 2008, sales increased by 3%, with sales growth driven by our key brands, the addition of MedImmune and the strong performance of Emerging Markets businesses which grew at 16%. Core operating margin increased by 1.6 percentage points in constant currency terms, as a result of improved efficiencies throughout the organisation and delivery of our restructuring initiatives. The improved Core operating margin translated 3% sales growth for the year into a 9% increase in Core operating profit and an 8% increase in Core earnings per share to $5.10.

Cash generation was strong in 2008; cash from operating activities increased by over $1.2 billion, driven principally by an increase in earnings before interest, tax, depreciation and amortisation (EBITDA) and reduced working capital outflows. This enabled us to make the payment to Merck as part of the planned phased exit arrangements, invest in capital and intangible assets to drive future business growth and productivity and fund a 10% increase in the full year dividend, whilst at the same time reducing our net debt by more than $1.9 billion to $7.2 billion at the end of 2008. This strong performance puts us well ahead of our plan to reduce net debt to $7 billion by the end of 2010.

We recently announced an expanded scope for our restructuring programme to drive further improvements in our long-term competitiveness. Overall, the programme is now anticipated to deliver $2.1 billion in annual savings by the end of 2010 (up from $1.4 billion), reaching $2.5 billion per annum by 2013. The restructuring costs to deliver these benefits are now expected to be $2.9 billion (up from $2 billion).

Our continued efforts to drive efficiencies throughout the business, combined with a strong focus on converting growth in EBITDA into cash, should ensure resilient financial performance as we face an increasingly challenging external environment.

SIMON LOWTH
Chief Financial Officer