AstraZeneca plc, has managed to improve its bottom line by 8.2 per cent during the year ended December 2010 basically due to higher sales in emerging market, including China. Its net profit touched to $8,106 million from $7,490 million in the previous year. The lower sales in US and Western Europe impacted sales growth adversely and its net sales for the year increased marginally by 1.4 per cent to $33,269 billion from 32,804 billion. The stiff competition from generic for several products and the absence of H1N1 pandemic influenza vaccine revenue also put pressure. With lower sales growth, the operating profit declined by 0.4 per cent to $11,494 million from $11,543 million.
AstraZeneca's sales in US declined by 7 per cent to $13,727 million and that in Western Europe declined by one per cent to $9,168 million. However, its sales in established ROW improved by 17 per cent to $5,176 million and that in emerging ROW improved by 19 per cent to $5,198 million.
The worldwide sales of its leading product Crestor touched to $5,691 million, a growth of 26 per cent. However, the sales of second leading product Nexium remained stagnant at $4,969 million. The sales of Seroquel IR declined by one per cent to $4,148 million. The sales of Seloken/Toprol-XL, Arimidex, and Synagis also declined by 16 per cent, 21 per cent, 4 per cent respectively during he year 2010 mainly due to lower sales in US.
David Brennan, CEO, said, “Our performance in 2010 underlines the strength and resilience of AstraZeneca's business. Despite government pricing pressures and anticipated patent expires in the US and Western Europe, our revenues remained in line with the previous year driven by excellent performance of our key brands and continued growth in emerging markets. This performance, combined with disciplined management of the business enabled us to deliver increased earnings, increase the dividend and return residual cash to shareholders through share repurchases.”
Over the last several years the company has undertaken significant restructuring initiatives aimed at reshaping the cost base to improve long term competitiveness. The first phase of the restructuring programme is now complete, resulting in the realisation of annual benefits of $2.4 billion achieved to date at cumulative cost of around $2.5 billion.
As per guidance given by company for the year 2011, the revenue will continue to be affected by the loss of market exclusivity for Arimidex in the US and for Arimidex in Europe once exclusivity expires in February. The company anticipates that revenue could range from flat to a low-single digit decline compared with 2010 revenue. The board has declared higher equity dividend of $2.55 for the year 2010.