Slide 1: 2Q and Half Year Results 2012
2Q and Half Year Results 2012 \> eoauazelsy
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 following cautionary statement: This presentation contains certain forward-looking statements
Slide 3: 2Q and Half Year Results 2012
2Q and Half Year Results 2012 \> eoauazelsy
Slide 4: Simon Lowth, Interim CEO
2Q and Half Year Results 2012 Simon Lowth, Interim CEO
Slide 5: First Half 2012: Revenue profile
First Half 2012 Revenue profile - Loss of exclusivity on several brands (Seroquel IR) - Government interventions - Supply Chain - Disposals of Astra Tech & Aptium - Resilient performance for Crestor; growth for ONGLYZATM, Iressa, Faslodex, Brilinta. 5
Slide 6: First Half 2012: Restructuring and cost discipline
First Half 2012 Revenue profile Delivery on restructuring and continued cost discipline 6
Slide 7: First Half 2012: Progress on the pipeline
First Half 2012 Revenue profile Delivery on restructuring and continued cost discipline Progress on the pipeline - FORXIGATM positive recommendation for approval by EU CHMP (April) - Zinforo positive CHMP recommendation for EU approval (June) - 22 project progressions (7 first human testing); 10 pro
Slide 8: First Half 2012: Business development
First Half 2012 Revenue profile Delivery on restructuring and continued cost discipline Progress on the pipeline Portfolio strengthened through successful business development initiatives: - Amgen collaboration on 5 clinical stage projects in inflammation - Acquisition of Ardea Biosciences Inc. adds
Slide 9: First Half 2012: Cash returns to shareholders
First Half 2012 Revenue profile Delivery on restructuring and continued cost discipline Progress on the pipeline Portfolio strengthened through successful business development initiatives Cash returns to shareholders 9
Slide 10: First Half 2012: Maintain financial targets
First Half 2012 Revenue profile Delivery on restructuring and continued cost discipline Progress on the pipeline Portfolio strengthened through successful business development initiatives: Cash returns to shareholders Maintain financial targets for the full year: Core EPS $5.85 to $6.15 10
Slide 11: Headline results Q2 2012
Headline results Q2 2012 2012 2011 Actual CER $m $m growth growth Revenue 6,660 8,430 -21% -18% Core Operating Profit 2,269 3,322 -32% -27% Core EPS $1.53 $ 1.73 -12% -6% Restructuring ($0.12) ($0.08) Merck & MedImmune amortisation ($0.09) ($0.08) Intangible impairments -- -- Legal provisions ($0.05
Slide 12: Headline results 1H 2012
Headline results 1H 2012 1H 2012 1H 2011 Actual CER $m $m growth growth Revenue 14,009 16,722 -16% -15% Core Operating Profit 5,266 7,000 -25% -23% Core EPS $3.34 $3.96 -16% -13% Restructuring ($0.56) ($0.15) MedImmune/Merck amortisation ($0.18) ($0.16) Legal ($0.05) ($0.04) Reported EPS $2.55 $3.61
Slide 13: Tony Zook, Executive VP Global Commercial
2Q and Half Year Results 2012 Tony Zook, Executive VP Global Commerical
Slide 14: First Half 2012: Global commercial performance
First Half 2012: Global commercial performance Challenging market conditions - Loss of exclusivity - Government interventions - Global economic downturn Drive portfolio that is responsive to commercial investment - Brands that retain exclusivity - Markets that offer attractive growth opportunity Res
Slide 15: Regional revenue performance Q2 2012
Regional revenue performance Q2 2012 2012 CER CER $m growth $m LOE -15pts; Astra Tech/Aptium -2.4 pts Global Revenue 6,660 -18% (1,553) Supply chain -2pts US 2,339 -29% (953) Seroquel IR ($763m) Seroquel IR, Nexium, Arimidex Western Europe 1,626 -20% (438) & Merrem generics 15
Slide 16: Regional revenue performance Q2 2012
Regional revenue performance Q2 2012 2012 CER CER $m growth $m LOE -15pts; Astra Tech/Aptium -2.4 pts Global Revenue 6,660 -18% (1,553) Supply chain -2pts US 2,339 -29% (953) Seroquel IR ($763m) Seroquel IR, Nexium, Arimidex Western Europe 1,626 -20% (438) & Merrem generics Established ROW 1,284 -12
Slide 17: Regional revenue performance Q2 2012
Regional revenue performance Q2 2012 2012 CER CER $m growth $m LOE -15pts; Astra Tech/Aptium -2.4 pts Global Revenue 6,660 -18% (1,553) Supply chain -2pts US 2,339 -29% (953) Seroquel IR ($763m) Seroquel IR, Nexium, Arimidex Western Europe 1,626 -20% (438) & Merrem generics Established ROW 1,284 -12
Slide 18: Brand revenue performance Q2 2012
Brand revenue performance Q2 2012 2012 CER CER $m growth $m Global Revenue 6,660 -18% (1,553) Crestor 1,587 -5% (87) Canada (86) Brazil (13) Symbicort 795 +3% 27 Seroquel XR 370 -1% (3) Iressa 154 +13% 18 Faslodex 161 +24% 32 ONGLYZATM 79 +72% 33 Brilinta/Brilique 18 n/m 18 18
Slide 19: Brand revenue performance Q2 2012
Brand revenue performance Q2 2012 2012 CER CER $m growth $m Global Revenue 6,660 -18% (1,553) Crestor 1,587 -5% (87) Canada (86) Brazil (13) Symbicort 795 +3% 27 Seroquel XR 370 -1% (3) Iressa 154 +13% 18 Faslodex 161 +24% 32 ONGLYZATM 79 +72% 33 Brilinta/Brilique 18 n/m 18 Nexium 949 -13% (140) Ser
Slide 20: Crestor
Crestor 2Q 2012 Sales: $1,587m -5% 1,800 1,600 EM ROW $174m +6% 1,400 EST ROW 1,200 $331m -20% 1,000 W. EUR $295m -1% 800 600 US 400 $787m -1% 200 0 2Q 2011 2Q 2012 US W EUR EST ROW EM ROW 20
Slide 21: Crestor: US performance
Crestor: US performance Crestor Trx growth ahead of the statin market Continuing therapy (94% of volume) stable 500,000 NTS Switch To Continuing Q2 1H 400,000 Market 1.3% 1.5% 300,000 CRESTOR 1.5% 1.8% TRX 94% 200,000 100,000 - 4/1/11 6/1/11 8/1/11 10/1/11 12/1/11 2/1/12 4/1/12 6/1/12 21 Source: IMS
Slide 22: Crestor: US
Crestor: US Net dynamic volume stable; steady improvement in “Switch from” trend Simva Warning Multi-source atorva Jun 10 May 30 34,000 Crestor Dynamic Volumes 24,000 14,000 4,000 -6,000 Improving “Switch from” trend -16,000 4/1/2011 6/3/2011 8/5/2011 3/2/2012 5/4/2012 4/22/2011 5/13/2011 6/24/2011
Slide 23: Crestor
Crestor 2Q 2012 Sales: $1,587m -5% US 1,800 • US TRx +1.5% 1,600 EM ROW $174m +6% - Statin market +1.3% 1,400 EST ROW • Crestor volumes stable post generic 1,200 $331m -20% atorvastatin 1,000 W. EUR $295m -1% 800 600 US 400 $787m -1% 200 0 2Q 2011 2Q 2012 US W EUR EST ROW EM ROW 23
Slide 24: Crestor
Crestor 2Q 2012 Sales: $1,587m -5% US 1,800 • US TRx +1.5% 1,600 EM ROW $174m +6% - Statin market +1.3% 1,400 EST ROW • Crestor volumes stable post generic 1,200 $331m -20% atorvastatin 1,000 W. EUR $295m -1% 800 RoW 600 • RoW sales $800m; -8% US 400 $787m -1% - Adj. for LOE in Canada; +1% 200 • Jap
Slide 25: Seroquel IR
Seroquel IR 2Q 2011 Sales: $277m -75% 1,200 US • Sales -86%; rapid erosion of brand 1,000 following loss of exclusivity at end 800 March 2012 600 EM ROW 400 $45m -23% EST ROW $54m -2% 200 W. EUR $52m -61% US $126m -86% 0 2Q 2011 2Q 2012 US W EUR EST ROW EM ROW 25
Slide 26: Seroquel IR: Rapid erosion of branded product post LOE
Seroquel IR: Rapid erosion of branded product post LOE Week's Post LOE 26 SQL IR 16 weeks post LOE (107 days), Lexapro data 20 weeks post LOE Source: IMS NPA weekly data – Data Week Ending 7/13/12
Slide 27: Seroquel IR
Seroquel IR 2Q 2011 Sales: $277m -75% 1,200 US • Sales -86%; rapid erosion of brand 1,000 following loss of exclusivity at end 800 March 2012 600 RoW EM ROW 400 $45m -23% • RoW sales $151m; -39% EST ROW $54m -2% 200 W. EUR $52m -61% US $126m -86% 0 2Q 2011 2Q 2012 US W EUR EST ROW EM ROW 27
Slide 28: Seroquel XR
Seroquel XR 2Q 2011 Sales: $370m -1% US 500 • Seroquel XR TRx -3% vs market -1% - TRx share 4.95% 400 EM ROW - Down 17 basis pts in April (from pre Seroquel IR LOE) $38m +40% - Share stabilising EST ROW 300 $23m +4% W. EUR $112m -6% 200 US 100 $197m -4% 0 2Q 2011 2Q 2012 US W EUR EST ROW EM ROW 28
Slide 29: Seroquel XR
Seroquel XR 2Q 2011 Sales: $370m -1% US 500 • Seroquel XR TRx -3% vs market -1% - TRx share 4.95% 400 EM ROW - Down 17 basis pts in April (from pre Seroquel IR LOE) $38m +40% - Share stabilising EST ROW 300 $23m +4% W. EUR $112m -6% 200 RoW • RoW sales $173m +3% US 100 $197m -4% • Western Europe sal
Slide 30: Symbicort
Symbicort 2Q 2012 Sales: $795m +3% US 800 EM ROW • TRx +12% vs market +1% $104m -3% 700 EST ROW • NRx share 22.5% $108m +6% 600 - Up 1 pt vs December 2011 500 • New patient share 27.2% W. EUR 400 $334m -5% 300 RoW • Sales $546m -3% 200 100 US $249m +21% 0 2Q 2011 2Q 2012 US W EUR EST ROW EM ROW 30
Slide 31: Brilinta/Brilique
Brilinta/Brilique Europe • Successfully secured pricing approvals in Germany & France • Continued strong performance in Germany • Good progress in Nordic region • Successful launch in Italy 31
Slide 32: Brilique: Strong performance in Germany
Brilique: Strong performance in Germany Brilique reported to be on protocol in 85% of target hospitals through June Where on protocol, Brilique #1 product in share Hospital presence is now driving of ACS patients increased retail utilisation Share of OAP for ACS patients: OAP Retail Dynamic Share Br
Slide 33: Brilique: Performance in Nordic region
Brilique: Performance in Nordic region DENMARK: OAP Volume Market Share SWEDEN: OAP Volume Market Share NORWAY: OAP Volume Market Share 33 Source: IMS Health MIDAS
Slide 34: Brilique: Launch in Italy
Brilique: Launch in Italy Share of OAP in ACS patients: BRILINTA “On Formulary“ Target Hospitals Source: AZ primary research (Hospital Tracker Study) 34
Slide 35: Brilinta: US launch progress
Brilinta: US launch progress Steady increase in key indicators Growth in TRx’s Q4 Q1 Q2 ‘11 ‘12 ‘12 Top 400 % on Formulary 46% 68% 75% Top 400% on Protocol 14% 20% 32% IC Trial Overall 6% 15% 25% IC Trial when on Protocol 8% 20% 29% MM Overall Unrestricted Access 60% 61% 66% MM Part D Unrestricted A
Slide 36: Brilinta/Brilique
Brilinta/Brilique US • Progress on formulary/protocol/trial process • Positive Rx trend continues • Added as a Class I recommendation to ACCF/AHA guidelines for the management of UA and NSTEMI patients in July (invasive & non-invasive) 36
Slide 37: ONGLYZA
ONGLYZATM 2Q 2012 Revenue: $79m +72% 140 US • TRx for DPP4’s up 24% in Q2 120 • AZ franchise share: 16.9% (June 2012) 100 - ONGLYZATM share: 11.5% EM ROW 80 $6m +100% EST ROW - KOMBIGLYZE XRTM share: 5.4% $4m n/m 60 W. EUR $11m +22% 40 US $58m +76% 20 0 2Q 2011 2Q 2012 US W EUR EST ROW EM ROW 37
Slide 38: ONGLYZA Franchise: US performance
ONGLYZATM Franchise: US performance ONGLYZATM Franchise TRx’s: Q2 +52% Source: IMS NPA (June ’12 Based on Estimate Through Week Ending 6/22/12) 38 TRx Marktet Share = Average Share for the quarter
Slide 39: ONGLYZA
ONGLYZATM 2Q 2012 Revenue: $79m +72% 140 US • TRx for DPP4’s up 24% in Q2 120 • AZ franchise share: 16.9% (June 2012) 100 EM ROW - ONGLYZATM share: 11.5% $6m +100% 80 - KOMBIGLYZE XRTM share: 5.4% EST ROW $4m n/m 60 W. EUR $11m +22% 40 RoW US $58m +76% • RoW revenue $21 million, +62% 20 0 2Q 2011 2Q
Slide 40: Faslodex Iressa
Faslodex Iressa 2Q 2012 Sales: $161m +24% 2Q 2012 Sales: $154m +13% 250 250 200 200 EM ROW 150 $24m +35% 150 EST ROW EM ROW $15m n/m $64m +16% 100 W. EUR 100 $47m +4% EST ROW $56m +10% 50 50 US $75m +15% W. EUR $34m +12% 0 0 2Q 2011 2Q 2012 2Q 2011 2Q 2012 US W EUR US W EUR EST ROW EM ROW EST ROW EM
Slide 41: Julie Brown, Interim Chief Financial Officer
2Q and Half Year Results 2012 Julie Brown, Interim Chief Financial Officer
Slide 42: Core margin: Q2 2012
Core margin: Q2 2012 CER Delta vs $m % % sales PY CER Revenue 6,660 -18% - Core Gross Margin 5,320 -20% 79.9 -190 bps Distribution (75) -10% 1.1 -10 bps 42
Slide 43: Core margin: Q2 2012
Core margin: Q2 2012 CER Delta vs $m % % sales PY CER Revenue 6,660 -18% - Core Gross Margin 5,320 -20% 79.9 -190 bps Distribution (75) -10% 1.1 -10 bps Core SG&A (2,105) -18% 31.6 -40 bps 43
Slide 44: Core margin: Q2 2012
Core margin: Q2 2012 CER Delta vs $m % % sales PY CER Revenue 6,660 -18% - Core Gross Margin 5,320 -20% 79.9 -190 bps Distribution (75) -10% 1.1 -10 bps Core SG&A (2,105) -18% 31.6 -40 bps Core Other Income 182 - 2.7 +50 bps 44
Slide 45: Core margin: Q2 2012
Core margin: Q2 2012 CER Delta vs $m % % sales PY CER Revenue 6,660 -18% - Core Gross Margin 5,320 -20% 79.9 -190 bps Distribution (75) -10% 1.1 -10 bps Core SG&A (2,105) -18% 31.6 -40 bps Core Other Income 182 - 2.7 +50 bps Core Pre-R&D Profit 3,322 -21% 49.9 -190 bps 45
Slide 46: Core margin: Q2 2012
Core margin: Q2 2012 CER Delta vs $m % % sales PY CER Revenue 6,660 -18% - Core Gross Margin 5,320 -20% 79.9 -190 bps Distribution (75) -10% 1.1 -10 bps Core SG&A (2,105) -18% 31.6 -40 bps Core Other Income 182 - 2.7 +50 bps Core Pre-R&D Profit 3,322 -21% 49.9 -190 bps Core R&D (1,053) -4% 15.8 -240
Slide 47: Core margin: Q2 2012
Core margin: Q2 2012 CER Delta vs $m % % sales PY CER Revenue 6,660 -18% - Core Gross Margin 5,320 -20% 79.9 -190 bps Distribution (75) -10% 1.1 -10 bps Core SG&A (2,105) -18% 31.6 -40 bps Core Other Income 182 - 2.7 +50 bps Core Pre-R&D Profit 3,322 -21% 49.9 -190 bps Core R&D (1,053) -4% 15.8 -240
Slide 48: Restructuring Programme: Phase 2012-14
Restructuring Programme: Phase 3 2012-14 Total programme cost estimated at $2.1 billion; most to be taken in 2012 Q1 Q2 1H Total 702 205 907 COGS 55 6 61 R&D 445 136 581 SG&A 202 63 265 Estimated annual benefits of $1.6 billion by end 2014 48
Slide 49: 1H 2012: Cash flow/distributions
1H 2012: Cash flow/distributions Cash generated from operating activities $2.8 billion (1H 2011 $2.8 billion) - Working capital management and lower tax more than offset lower operating profit and pension fund contribution 49
Slide 50: 1H 2012: Cash flow/distributions
1H 2012: Cash flow/distributions Cash generated from operating activities $2.8 billion (1H 2011 $2.8 billion) - Working capital management and lower tax more than offset lower operating profit and pension fund contribution Shareholder distributions - Progressive dividend; first interim $0.90 (~ 1/3
Slide 51: 1H 2012: Cash flow/distributions
1H 2012: Cash flow/distributions Cash generated from operating activities $2.8 billion (1H 2011 $2.8 billion) - Working capital management and lower tax more than offset lower operating profit and pension fund contribution Shareholder distributions - Progressive dividend; first interim $0.90 (~ 1/3
Slide 52: 1H 2012: Cash flow/distributions
1H 2012: Cash flow/distributions Cash generated from operating activities $2.8 billion (1H 2011 $2.8 billion) - Working capital management and lower tax more than offset lower operating profit and pension fund contribution Shareholder distributions - Progressive dividend; first interim $0.90 (~ 1/3
Slide 53: Guidance for 2012 (Core basis)
Guidance for 2012 (Core basis) Revenue Low to mid-teens 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 Income Low double-digit decline vs 2011 Tax Rate Effective rep
Slide 54: Julie Brown, Interim Chief Financial Officer
2Q and Half Year Results 2012 Julie Brown, Interim Chief Financial Officer
Slide 55: 2Q and Half Year Results 2012
2Q and Half Year Results 2012 \> eoauazelsy