Abbott Highlights Top-Tier Financial Performance, Strong Growth in Emerging Markets at Annual Meeting
Abbott Park, Illinois (NYSE: ABT) — Healthy performance across Abbott’s diverse businesses and emerging markets expansion drove strong and consistent growth in 2010, Chairman and Chief Executive Officer Miles D. White told shareholders today at the company’s annual meeting.
“We continued to grow our company in 2010, despite significant challenges affecting our industry,” said Mr. White. “Abbott generated strong results while reshaping our organization, building on established strengths and positioning ourselves to benefit from changing markets around the world.”
The diversity of Abbott’s portfolio has enabled the company to deliver consistent top-tier performance. Balanced performance across the company’s major businesses and continued strong international growth drove a fourth consecutive year of double-digit ongoing earnings per share growth in 2010. The company has forecasted a fifth consecutive year of double-digit ongoing earnings per share growth in 2011, driven by continued strong revenue growth and market leadership across key emerging markets.
Enhancing Global Presence
In 2010, Abbott completed three significant actions to expand its footprint in the world’s fastest-growing markets. Over the next 10 years, emerging markets’ economies will compose 40 percent of the world’s gross domestic product, growing at three times the rate of developed markets.
“In each of these markets, Abbott has long been a respected provider of quality products and services,” said Mr. White. “Actions taken in 2010 will let us build on that strong foundation, and will help us increase our focus on the specific needs of the markets we serve.”
Highlights of 2010 actions:
Completed the acquisition of Solvay Pharmaceuticals, adding nearly $3 billion in 2010 revenue, a robust branded generics portfolio, and expanding Abbott’s footprint in key emerging markets across Asia, Eastern Europe and Latin America.
Announced a licensing agreement with Zydus Cadila to commercialize a portfolio of more than 24 branded generic pharmaceuticals in 15 emerging markets, with an option for more than 40 additional products.
Acquired Piramal Healthcare Solutions and its portfolio of more than 350 branded generic pharmaceuticals in India. Abbott is now the No. 1 pharmaceutical company in India.
Abbott’s diverse businesses are presented across three complementary segments:
Durable Growth: Businesses include Established Pharmaceuticals, Nutritionals, Diabetes Care and two of our diagnostics businesses. These businesses offer consistent, stable returns and have minimal patent risk with less reliance on significant research investments.
Innovation-Driven Devices: Businesses include Molecular Diagnostics, Vision Care and Vascular. This segment requires a higher level of R&D investment to deliver innovative technologies and can generate significant revenue and profit contribution.
Proprietary Pharmaceuticals: This segment primarily includes global patented pharmaceuticals and a promising pipeline across therapeutic areas.
The strong performance of these businesses generated record operating cash flow in 2010. In addition, Abbott has paid a cash dividend for 88 years and, in 2011, increased its quarterly cash dividend for the 39th consecutive year. Abbott’s consistent dividend history is a key component of the company’s success as a premium long-term investment.
In 2010, Abbott also invested more than $3.7 billion in leading-edge research across the company to develop innovative therapies in key research areas, including cancer, heart disease, autoimmune disorders, hepatitis, Alzheimer’s disease and vaccines. Nearly 20 new molecular entities and indications will enter Phase 2 or 3 development by the end of 2011.
In 2010, Abbott and the Abbott Fund provided approximately $600 million in grants, patient assistance programs, humanitarian support, product donations and community programs, reaching millions of people around the world. For more information, please see Abbott’s 2010 Global Citizenship Report at www.abbott.com/citizenship.
In 2010, Abbott was recognized as a top employer in numerous countries around the world and was also named to Barron’s “World’s Most Respected Companies” for the sixth consecutive year in 2011. Also in 2010, Abbott was named “Company of the Year” and “Management Team of the Year” by Scrip, the pharmaceutical and biotech news organization.
During the meeting, the majority of shareholders approved the advisory votes on both executive compensation and an annual voting schedule for this item. A majority of shareholders rejected a proposal to limit increases on pharmaceutical pricing. Shareholders also ratified the selection of Deloitte & Touche LLP as auditors of the corporation for 2011.
Additionally, Abbott elected 10 members to the board of directors:
Robert J. Alpern, M.D., Ensign professor of medicine, professor of internal medicine, and dean of Yale School of Medicine.
Roxanne S. Austin, former president and chief executive officer, Move Networks, Inc.
W. James Farrell, retired chairman and chief executive officer, Illinois Tool Works Inc.
H. Laurance Fuller, retired co-chairman of the board, BP Amoco, p.l.c.
Edward M. Liddy, partner, Clayton, Dubilier & Rice, LLC.
Phebe N. Novakovic, executive vice president, Marine Systems, General Dynamics Corporation.
William A. Osborn, retired chairman and chief executive officer, Northern Trust Corporation and The Northern Trust Company.
Samuel C. Scott III, retired chairman, president and chief executive officer, Corn Products International, Inc.
Glenn F. Tilton, non-executive chairman of the board, United Continental Holdings, Inc.
Miles D. White, chairman of the board and chief executive officer, Abbott.
Three directors retired from Abbott’s board of directors, including: The Rt. Hon. Lord Owen CH FRCP (director since 1996); Roy S. Roberts (director since 1998) and William D. Smithburg (director since 1982).
William M. Daley resigned from the board of directors in January 2011, after seven years of service, to serve as White House Chief of Staff.
Abbott (NYSE: ABT) is a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company employs nearly 90,000 people and markets its products in more than 130 countries.
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