FOURTH QUARTER AND FULL YEAR RESULTS 2011

London, 2 February 2012

Revenue for the full year was down 2 percent at constant exchange rates (CER) at $33,591 million.

-Strong double-digit sales growth at CER for Crestor, Seroquel XR and Symbicort; Emerging Markets revenue increased by 10 percent at CER in the fourth quarter and for the full year.

-Revenue performance reflects the loss of nearly $2 billion of revenue from generic competition, as well as a further $1 billion lost to the impact of government price interventions.

Core operating profit for the full year was down 4 percent at CER to $13,167 million.

-Core operating margin of 39.2 percent of revenue was down 1.2 percentage points at CER, as benefits arising from higher gross margin and lower SG&A spend at CER were more than offset by increased expenditures in R&D and lower Core other income.

Core EPS for the full year increased by 7 percent at CER to $7.28.

-Core EPS benefited from the lower number of shares outstanding resulting from net share repurchases and a lower tax rate compared with last year.

Reported EPS for the full year was up 29 percent at CER to $7.33.

-Gain on the sale of Astra Tech, which was excluded from Core EPS in the third quarter 2011, amounted to $1.08. The growth rate in Reported EPS also benefited from the fact that intangible impairments excluded from Core earnings were higher in 2010.   

Revenue in the fourth quarter unchanged at CER; Core EPS was up 12 percent at CER.

Net cash distributions to shareholders increased by 71 percent to $9,370 million.

-Dividend increased by 10 percent to $2.80 for the full year. Net share repurchases total $5.6 billion in 2011.

-Board announces plans for $4.5 billion in net share repurchases for 2012.

Company reaffirms planning assumptions for total revenue, margins and cash deployment for the period 2010-14.

-Risk adjusted revenue from recently launched and pipeline products lowered to range of $2 to $4 billion.

Company announces new set of restructuring initiatives (see page 3).  

Financial Summary

+----------+-----------+-----------+------+---+---------+---------+------+---+
|Group |4th Quarter|4th Quarter|Actual|CER|Full Year|Full Year|Actual|CER|
| | 2011| 2010| %| %| 2011| 2010| %| %|
| | $m| $m| | | $m| $m| | |
+----------+-----------+-----------+------+---+---------+---------+------+---+
|   Revenue| 8,656| 8,617| -| -| 33,591| 33,269| +1| -2|
+----------+-----------+-----------+------+---+---------+---------+------+---+
|Reported | | | | | | | | |
+----------+-----------+-----------+------+---+---------+---------+------+---+
|   | 2,167| 2,411| -10|-14| 12,795| 11,494| +11|+10|
|Operating | | | | | | | | |
|Profit | | | | | | | | |
+----------+-----------+-----------+------+---+---------+---------+------+---+
|   Profit | 2,052| 2,283| -10|-14| 12,367| 10,977| +13|+11|
|before Tax| | | | | | | | |
+----------+-----------+-----------+------+---+---------+---------+------+---+
|   | $1.16| $1.15| -| -5| $7.33| $5.60| +31|+29|
|Earnings | | | | | | | | |
|per Share | | | | | | | | |
+----------+-----------+-----------+------+---+---------+---------+------+---+
|Core* | | | | | | | | |
+----------+-----------+-----------+------+---+---------+---------+------+---+
|   | 2,990| 2,865| +4| +1| 13,167| 13,603| -3| -4|
|Operating | | | | | | | | |
|Profit | | | | | | | | |
+----------+-----------+-----------+------+---+---------+---------+------+---+
|   Profit | 2,875| 2,737| +5| +1| 12,739| 13,086| -3| -4|
|before Tax| | | | | | | | |
+----------+-----------+-----------+------+---+---------+---------+------+---+
|   | $1.61| $1.39| +16|+12| $7.28| $6.71| +9| +7|
|Earnings | | | | | | | | |
|per Share | | | | | | | | |
+----------+-----------+-----------+------+---+---------+---------+------+---+

* Core financial measures are supplemental non-GAAP measures which management believe enhance understanding of the Company's performance; it is upon these measures that financial guidance for 2012 is based. See page 13 for a definition of Core financial measures and pages 13 and 14 for a reconciliation of Core to Reported financial measures.

David Brennan, Chief Executive Officer, said: "Disciplined execution of our strategy has delivered a good performance in 2011 in the face of intensified pricing pressure and generic competition. Our strong cash flow supported a significant increase in cash distributions to shareholders and continued investment to drive future growth and value. While the further expected losses of market exclusivity make for a challenging 2012 outlook, we remain committed to a long-term, focused, R&D based strategy, and today we have announced further steps to drive productivity in all areas to improve returns on our investment in innovation."
 

Media Esra Erkal-Paler (London) +44 20 7604 8030
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