Slide 1: Full Year Results 2011
Full Year Results 2011 \ eoauazeysy
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements In order, among other things, to utilise the 'safe harbour' provisions of the US Private Securities Litigation Reform Act 1995, we are providing the f ll i cautionary following i statement: Thi This presentation i contains i certain i fforwar
Slide 3: Full Year Results 2011 - David Brennan, CEO
Full Year Results 2011 David Brennan, CEO
Slide 4: 2011 key facts
30 000 30,000CV deaths that could be prevented if Brilinta was used instead of current standard t d d off care iin th the >3 million illi annuall ACS patients ti t in i the th G8 countries ti % 65 of AstraZeneca revenue growth that has come from Emerging Markets in the last 5 years $3billion AstraZe
Slide 5: Industry R&D success rate
3 6 % to % Industry R&D success rate for pre-clinical to successful registration and launch 5
Slide 6: Restructuring benefits and R&D success rate
3 6 % to % Industry R&D success rate for pre-clinical to successful registration and launch $4.3 billion Annuall b A benefits fit ttargeted t d by b end d off 2014 from f AstraZeneca restructuring programmes 2009-11 6
Slide 7: Driving ROI from R&D
Driving ROI from R&D Investment period Returns period • Function costs • Supply chain capacity Reduce • Site footprint • Sales and Marketing (mature markets) • Non-customer facing roles • New talent • New commercial channels Invest/Innovate • Critical capabilities • Emerging Markets - Sales S l andd
Slide 8: Margin improvement, R&D investment and cash distributions
10 Percentage points Improvement in AstraZeneca Core Pre-R&D margin, 2006-11 (from 44% to 54% of revenue) $9 4 $9.4 $ billion Cash distributions to AstraZeneca $5 0 $5.0 billion Core P&L investment in R&D in 2011 shareholders in 2011 8
Slide 9: Full Year Results 2011
Full Year Results 2011 \ eoauazeysy
Slide 10: Headline results FY 2011
Headline results FY 2011 2011 2010 Actual CER $m $m growth growth Revenue 33,591 33,269 +1% -2% Core Operating Profit 13,167 13,603 -3% -4% Core EPS $7.28 $6.71 +9% +7% Restructuring ($0.63) ($0.62) MedImmune/Merck amortisation ($0.32) ($0.29) Intangible Impairments ($0.01) ($0.29) Legal provisions
Slide 11: Headline results FY 2011
Headline results FY 2011 2011 2010 Actual CER $m $m growth growth Revenue 33,591 33,269 +1% -2% Core Operating Profit 13,167 13,603 -3% -4% Core EPS $7.28 $6.71 +9% +7% Reported EPS $7.33 $5.60 +31% +29% Full Year Dividend $2.80 $2.55 11
Slide 12: Simon Lowth, Chief Financial Officer
Full Year Results 2011 Simon Lowth, Chief Financial Officer
Slide 13: Core margin: FY 2011
Core margin: FY 2011 Delta vs $m % sales PY CER Revenue 33,591 - Core Gross Margin 27 619 27,619 82 2 82.2 +130 bps b Distribution (346) 1.0 - Core SG&A ((9,918) , ) 29.5 -10 bps p Core Other Income 845 2.5 -20 bps Core Pre-R&D Pre R&D Profit 18,200 54.2 +100 100 bps Core R&D (5,033) 15.0 -220 bps C
Slide 14: Restructuring Programme: Phase 1 complete 2007-2009
Restructuring Programme: Phase 1 complete 2007-2009 Headcount Impact Programme Cost 2007 2009 2007-2009 2007 2009 $m 2007-2009 Global Supply Chain 4,250 (1,003) SG&A 6,750 (1,216) Annual benefits R&D 1,600 (288) 2010 $m $ Total 12,600 (2,506) 2,400 14
Slide 15: Restructuring Programme: Phase 2 complete 2010-2011
Restructuring Programme: Phase 2 complete 2010-2011 Headcount Impact Programme Cost 2010 2012* 2010-2012* 2010 2011 $m 2010-2011 Global Supply Chain 1,700 (198) SG&A 3,430 (782) Annual benefits R&D 3,730 (1,122) 2014 $m $ Total 8,860 (2,102) 1,900 * Headcount Impact: Some employees for which charges
Slide 16: Net headcount developments: 2006-2011
Net headcount developments: 2006-2011 Global R&D Emerging Other Supply Chain SG&A R&D AstraTech Reinvestment† Markets Reinvestment (3,000) -9,600 Net Wave 1 & 2 20,500* (8,000) (13 000) (13,000) (18,000) (23,000) Headcount Dec 31st 2006 (66,800) Headcount Dec 31st 2011 (57,200) * Some Employees affe
Slide 17: Restructuring Programme: Phase 3 2012-2014
Restructuring Programme: Phase 3 2012-2014* Headcount Impact Programme Cost 2012 2014** 2012-2014** 2012 2014 $m 2012-2014 Global Supply Chain 1,350 (500) SG&A 3,750 (800) Annual benefits R&D 2 200 2,200 (800) 2014 $m $ Total ~7,300 (2,100) † 1,600 * Subject to completion of requisite consultation p
Slide 18: 2011 Use of Cash
2011 Use of Cash $bn, Act RoX 40% Reinvestment Rate 18 $9.4bn Return 3.3 to Shareholders 16 18 1.8 AstraTech 14 1.1 3.8 12 10 11.1 5.6 8 6 4 3.7 8.3 2.8 2 0 Opening Net Pre R&D R&D Capex Dividends Net SBB Closing Cash Net Cash 18
Slide 19: Cash generation: 2011
Cash generation: 2011 2011 2010 $m $m Closing net cash/(debt) 2,849 3,653 Gross debt (9,328) (9,222) Cash/Cash equivalents and STIs 12,177 12,875 19
Slide 20: Cash priorities
Cash priorities • Invest in the business • Debt service • Progressive dividend • Share repurchases 20
Slide 21: Cash distributions
Cash distributions • Progressive dividend policy - aim to maintain or grow • Full year dividend increased by 10 percent to $2.80 • Share repurchases - 2011: $5 $5.6bn 6bn net - 2012: Target net $4.5bn 21
Slide 22: Planning Assumptions 2010-14: Update
Planning Assumptions 2010-14: Update • Grow the Business - Revenue in the range g of $ $28bn to $34bn pper annum over the p period • Centre of gravity lower half of range going forward - Risk adjusted revenue contribution from the pipeline lowered to the range of $2bn to $4bn - Double-digit revenue
Slide 23: Guidance for 2012 (Core basis)
Guidance for 2012 (Core basis) Revenue Low double-digit decline at CER Gross Margin Below 2011, but above 80% Core Pre-R&D Margin Below 2011, but upper half of mid-term planning range Net Finance Expense In line with 2011 Other Operating p g Income Low double-digit g decline vs 2011 Tax Rate Effecti
Slide 24: R&D Update
R&D Update Martin Mackay, President Research & Development
Slide 25: Agenda
Agenda Portfolio o t o o Performance e o a ce Key Early Phase Projects R&D Strategy & Transformation 25
Slide 26: Made significant progress and delivering on key capabilities
Made significant progress and delivering on key capabilities I II III IV Culture Operating model Capabilities Portfolio • 90% address Payer Evidence • 60% involve Personalised Healthcare • 40% use P Predictive di ti S Science i • 87% apply new Clinical Trial Design & Interpretation 26
Slide 27: 2011-2012 portfolio
2011-2012 portfolio New indication Phase 3 Submitted Launched/Approved approvals NKTR-118 Renal impairment Further Markets USA, Europe Europe USA, Canada, Brazil MEDI-3250 CAZ AVI Add-on to Add t insulin i li USA Europe China USA Fostamatinib 1st Line Further markets Japan p Japan Europe, Canada, Br
Slide 28: AstraZeneca pipeline
AstraZeneca pipeline 38 Projects advanced or are new App/ Phase 1 Phase 2 Phase 3 Reg LCM TOTAL Discovery Projects Lch 29 24 4 5 17 86 7 Pipeline represents 21 Projects discontinued Progress since Jan 2011 28
Slide 29: Phase 3
Phase 3 FOSTAMATINIB NKTR-118 CAZ AVI Rheumatoid arthritis Opioid induced constipation Serious gram negative infections • Oral spleen tyrosine kinase (Syk) • Peripheral opioid • Beta-lactam/beta-lactamase inhibitor inhibitor antagonist • Phase 2 results: • Phase 2 results: Significant clinical • Pha
Slide 30: Setbacks
Setbacks Adults with Type 2 Diabetes • FDA Complete Response Letter Dapagliflozin • Additional Additi ld data t tto assess b benefit-risk fit i k profile fil • Application in EU and other countries ongoing Serous Ovarian Cancer • Discontinued development Olaparib • No overall survival benefit • In I
Slide 31: Phase 3 development decisions
Phase 3 development decisions Assets Area under investigation AZD1981 (CRTh2 receptor antagonist) Asthma / COPD AZD8931 (erbB kinase inhibitor) Breast cancer/Solid tumours AZD9773 (anti-TNF-alpha polyclonal antibody) Severe sepsis AZD6244 – selumetinib NSCLC / Solid tumours (MEK Inhibitor) CXL (beta
Slide 32: Phase 3 development decisions
Phase 3 development decisions AZD6244 – selumetinib Assets Non-small cell lung cancer AZD1981 (CRTh2 receptor antagonist) • MEK inhibitor Asthma with allergic component AZD8931 (erbB kinase inhibitor) • Leading cause of cancer mortality Breast cancer • 25% have KRAS mutation and poor AZD9773 (anti-T
Slide 33: Accelerating the R&D transformation
Accelerating the R&D transformation CONTINUE CONTINUE I II III IV Culture Operating model Capabilities Portfolio Lean, simple and Match resource Access best flexible organization to the portfolio science 33
Slide 34: Pioneering a virtual Neuroscience model
Pioneering a virtual Neuroscience model Higher New ways Improved innovation of working productivity Tap into the Autonomous AZ Drive rapid and richest science drug ‘hunters’ efficient execution available Integrate external Proprietary drug g Follow breaking activities y across discovery science to n
Slide 35: Progress towards becoming a leader in biopharmaceutical R&D
Progress towards becoming a leader in biopharmaceutical R&D innovation & productivity High quality Strong Asia & Culture, early stage Biologics Emerging Capabilities Leadership, pipeline pipeline Markets Engagement • Transformed leadership – 60% of senior leaders from outside • Payer Evidence Eviden
Slide 36: Tony Zook, Executive VP, Global Commercial Operations
Full Year Results 2011 Tony Zook, Executive VP, Global Commercial Operations
Slide 37: Regional revenue performance FY 2011
Regional revenue performance FY 2011 2011 CER CER $m growth ($)m Global Revenue 33,591 -2% (599) US 13,426 -2% (302) Crestor 3,074 +16% 434 Seroquel 4 123 4,123 +10% 376 Symbicort 846 +17% 125 ONGLYZA 156 +189% 102 Nexium 2,397 -11% (298) Arimidex 42 -91% (452) Toprol-XL 404 0 -41% 1% (28 ) (285) Me
Slide 38: Regional revenue performance FY 2011
Regional revenue performance FY 2011 2011 CER CER $m growth ($)m Global Revenue 33,591 -2% (599) US 13,426 -2% (302) Western Europe 8,501 8 501 -11% 11% (1,047) (1 047) Seroquel XR 490 +30% 107 Crestor 1,225 +5% 58 Nexium 762 -39% (471) Arimidex 260 -56% (327) Merrem 179 -48% 48% (156) 38
Slide 39: Regional revenue performance FY 2011
Regional revenue performance FY 2011 2011 CER CER $m growth ($)m Global Revenue 33,591 -2% (599) US 13,426 -2% (302) Western Europe 8 501 8,501 -11% 11% (1 047) (1,047) Established ROW 5,901 +4% 229 J Japan 3 064 3,064 +6% 6% 162 Canada 1,604 +1% 20 Other established ROW 1,233 +4% 47 39
Slide 40: Regional revenue performance FY 2011
Regional revenue performance FY 2011 2011 CER CER $m growth ($)m Global Revenue 33,591 -2% (599) US 13,426 -2% (302) Western Europe 8 501 8,501 -11% 11% (1 047) (1,047) Established ROW 5,901 +4% 229 Emerging Markets 5,763 +10% 521 40
Slide 41: Brand revenue performance FY 2011
Brand revenue performance FY 2011 2011 CER CER $m growth ($)m Global Revenue 33,591 -2% (599) Crestor 6,622 +13 742 Seroquel 5,828 +8 440 Symbicort 3,148 +11 300 Nexium 4 429 4,429 -12 12 (602) Arimidex 756 -53 (794) Merrem 583 -30 (249) 41
Slide 42: Crestor
Crestor FY 2011 Sales: $6,622m +13% CER • Global volume growth 2x statin market EM ROW • Crestor US TRx +4% 6,000 $661m +8% - Statin market +1% EST ROW 5,000 $1,662m +15% - Generic atorvastatin launched end November 4 000 4,000 - Crestor TRx volume stable W. EUR $1,225m +5% 3,000 2 000 2,000 US $3,0
Slide 43: Crestor TRx volume stable post generic atorvastatin
Crestor TRx volume stable post generic atorvastatin Growth vs prior year 600,000 Generic Atorvastatin 8 weeks pre vs 8 weeks post November 30th Pre/Post 500,000 +2% / +2% * 400,000 300,000 Pre/Post 200,000 +6% / +1% * 100,000 P /P t Pre/Post ** +4% / -10% 0 09//02/11 09//09/11 09//16/11 09//23/11 09
Slide 44: Crestor
Crestor FY 2011 Sales: $6,622m +13% CER • Global volume growth 2x statin market EM ROW • Crestor US TRx +4% 6,000 $661m +8% - Statin market +1% EST ROW 5,000 $1,662m +15% - Generic atorvastatin launched end November 4 000 4,000 - Crestor TRx volume stable W. EUR $1,225m +5% • Western Europe sales +5
Slide 45: Brilinta/Brilique
Brilinta/Brilique Formulary Approval Launch Reimbursement & Protocol Varies Markets 64 37 20 by market Access to new ACS ~58% 45% 38% 12% patients • Price reflects value proposition of reduced CV mortality • Price negotiations under way in Germany & France 45
Slide 46: Brilinta/Brilique
Brilinta/Brilique • Germany - 1000 key target hospitals - On protocol in ~70% • Where on protocol, Brilique accounting for 31% of new therapy initiations in ACS patients − Second only to clopidogrel • US - Managed care access to ~60% of covered lives - Top 400 target hospitals • On O formulary: f l
Slide 47: Strong record of commercial achievement
Strong record of commercial achievement >$1billion dollar brands 47
Slide 48: AstraZeneca has built a truly global prescription drug business
AstraZeneca has built a truly global prescription drug business 2011 Sales1 EMEA $10.6bn AsiaPac 10,700 FTEs Americas $6.5bn $16.5bn 10,700 FTEs 11,200 FTEs 48 1 Actual exchange rate. Source: AZ
Slide 49: Our Customers
Our Customers: W ’ experiencing We’re i i ad dramatic ti shift hift iin customer t demographics and expectations… … andd th they wantt more from their brand experiences Payer’s are gaining influence… … and are demanding a better value proposition The Traditional Industry Field Force model is increas
Slide 50: New customer centric approaches
New customer centric approaches… Service Team 650+ service team members Sales Representative >14,000 reps worldwide Di it l Digital Inside Medical Building our capability Inside Sales More than 350 worldwide 50
Slide 51: Nexium Volume vs Investment in US
Nexium Volume vs Investment in US Nexium TRx EU and Expenses 400 400 350 350 Nexium TRx EU 100% 100% dexed from Q4 2008 300 300 80% 80% TRx EU (M) 250 250 200 60% 60% 200 Expense - Ind 150 150 Nexium direct & 40% 40% field expense 100 100 20% 20% E 50 50 00 0% 0% 11Q08 2Q08 3Q08 4Q08 11Q09 2Q09 3Q09
Slide 52: Following success with Nexium in the US we are now rolling out new channels globally
Following success with Nexium in the US we are now rolling out new channels globally Design and Strategic assessment Post-launch Implementation 52
Slide 53: AstraZeneca has created a Global cross channel capability
AstraZeneca has created a Global cross channel capability... with high customer satisfaction Service Teams Inside sales Digital • Teams T in i 19 countries ti • Teams T in i 24 countries ti • More M th than 250 thousand th d HCPs • Nearly 14,000 contacts daily • More than 6,000 contacts daily • Supp
Slide 54: Commercial priorities
Commercial priorities • Deliver the top line while reducing total commercial cost over a product life-cycle • Enhanced customer c stomer satisfaction • Restructuring - Global Marketing and Sales to be consolidated into 3 regions (from 5) - Reduce non-customer facing positions j - Adjust field force
Slide 55: Full Year Results 2011
Full Year Results 2011 \ eoauazeysy
Slide 56: Q&A session
Q&A session If you wish to take part in the Q&A session you can either email a question or dial into the teleconference using one of the numbers below: UK ((freephone): p ) 0800 694 2370 US (freephone): 1 866 977 7645 Swedish (freephone): 0200 883 079 International: +44 (0)1452 557 749 C f Conferenc
Slide 57: Full Year Results 2011
Full Year Results 2011 \ eoauazeysy