SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October, 2002.
Serono S.A.
----------------------------------------
(Registrant's Name)
15 bis, Chemin des Mines
Case Postale 54
CH-1211 Geneva 20
Switzerland
----------------------------------------
(Address of Principal Executive Offices)
1-15096
----------------------------------------
(Commission File No.)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
----- -----
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
------- -------
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- )
------
SERONO
MEDIA RELEASE
FOR IMMEDIATE RELEASE
-----------------------
SERONO REPORTS STRONG GROWTH WITH THIRD QUARTER SALES UP 18%
-FOUR MAJOR BUSINESS AGREEMENTS SIGNED-
GENEVA, SWITZERLAND, OCTOBER 23, 2002 - Serono S.A. (virt-x: SEO and NYSE: SRA)
today reported its third quarter results for the period ended September 30,
2002.
Financial highlights
- Product sales up 18.2% to $349.3m
- Strong Rebif(R) growth of 46.1% to $139.4m (US $18.0m, RoW $121.4m)
- Strong Gonal-F(R) sales of $104.5m, up 22.7%
- Reported net income up 16.9% to $74.5m, and up 39.1% on a like-for-like*
basis
- EPS of $4.68 per equivalent bearer share and $0.12 per ADS
- Net cash flow from operating activities up 27.8% in the first nine months
to $380.1m
Key events
- Agreement with Pfizer to co-promote Rebif(R) in the US
- Agreement with Genentech to develop and market Raptiva(TM) for psoriasis
and other potential indications
- Agreement with AstraZeneca to develop and market anastrozole for ovulation
induction and improvement of follicular development
- Positive results of two Serostim(R) clinical trials
- Genset tender offer was successful
"I am very pleased to be announcing excellent third quarter results," said
Ernesto Bertarelli, Chief Executive Officer of Serono. "In addition to the
strong performance of our existing franchises it has been a very active quarter
with the conclusion of a number of significant agreements which further
strengthen our business."
-more-
* Excluding one-time initial payments related to signature of agreements with
Genentech and AstraZeneca
THIRD QUARTER FINANCIAL PERFORMANCE
Worldwide product sales were $349.3m in the third quarter, an increase of 18.2%
(2001: $295.4m) or 12.1% in local currencies, and $1,013.7m in the first nine
months of 2002, up 11.3% (2001: $911.0m) or 10.0% in local currencies.
During the third quarter of 2002, the weakness of the US dollar has resulted in
a positive currency impact of $18.0m on total product sales.
Royalty and licensing income was up 25.4% to $33.2m (2001: $26.5m), largely
reflecting an increase in licensing income derived from the $200m Pfizer
payment, which is being amortised over the lifetime of the agreement at $17.4m
per year.
Total revenues increased by 18.8% to $382.5m (2001: $321.9m).
The gross margin was 83.2% of product sales (2001: 83.1%) in the third quarter,
and 84.4% in the first nine months (2001: 82.3%).
Selling, General and Administrative expenses were $122.2m or 35.0% of product
sales (2001: $104.1m or 35.2% of product sales).
Reported Research and Development expenses were $101.3m or 29.0% of product
sales (2001: $78.8m or 26.7% of product sales). This quarterly increase
reflects three factors: the one-time initial payment to Genentech related to the
Raptiva(TM) agreement, the one-time initial payment to AstraZeneca for
anastrozole, and the start of the integration of Genset in September. Excluding
the one-time payments to Genentech and AstraZeneca, R&D expenses on a
like-for-like basis were $84.3m, or 24.1% of sales.
Operating income was $76.9m or 22.0% of product sales (2001: $69.7m or 23.6% of
product sales). Excluding the one-time R&D expenses mentioned above, operating
income on a like-for-like basis grew 34.7% to $93.9m, or 26.9% of sales.
Net financial income was $13.2m (2001: $9.4m).
Total taxes were $14.8m, representing an overall tax rate of 16.5% of profit
before tax (2001: $15.0m).
Reported net income grew 16.9% to $74.5m or 21.3% of product sales (2001: $63.8m
or 21.6% of product sales). Excluding the one-time R&D expenses mentioned
above, net income on a like-for-like basis grew 39.1% to $88.7m, or 25.4% of
sales. Reported basic earnings per share (EPS) were $4.68 per equivalent bearer
share (2001: $3.97) and $0.12 per American Depositary Share (ADS) (2001: $0.10).
For the nine months ended September 30, 2002, net cash flow from operating
activities was $380.1m, up 27.8% compared to $297.5m for same period of 2001.
-more-
STRONG WORLDWIDE GROWTH OF REBIF
In the third quarter 2002, worldwide sales of Rebif(R) (interferon beta 1-a) in
multiple sclerosis increased by 46.1% to $139.4m (2001: $95.4m).
Building on the excellent US launch in March 2002, sales in the US maintained
their momentum in the third quarter, reaching $18.0m. At the end of the third
quarter, over 8,000 patients were being treated with Rebif(R) in the US.
Rebif(R) is market leader outside the US, a position it has held since Q2 2001,
with sales of Rebif(R) in the rest of the world increasing by 27.2% to $121.4m
(2001: $95.4m).
Rebif(R) sales in the year to date were $377.3m (2001: $269.1m), up 40.2%. In
the fourth quarter the co-promotion with Pfizer has started, as well as the
Direct To Consumer campaign in the US, and the publication of the 12 month
EVIDENCE data in the peer reviewed journal Neurology is also expected in the
fourth quarter.
RECORD GROWTH OF GONAL-F SALES
In the third quarter 2002, worldwide reproductive health sales were $147.7m
(2001: $121.5m), an increase of 21.5%. Sales of Gonal-F(R) (recombinant human
FSH) increased by 22.7% to $104.5m (2001: $85.2m) in the third quarter, and were
up 9.4% to $329.2m (2001: $300.8m) in the year to date.
GROWTH HORMONE
Saizen(R) sales were $29.0m (2001: $28.5m) during the third quarter, and
increased by 12.3% to $88.0m (2001: $78.4) in the first nine months.
Serostim(R) sales were $24.4m (2001: $36.1m) in the third quarter and $68.6m in
the first nine months. In July, Serono announced positive results of two major
clinical trials of Serostim(R) for the treatment of AIDS-wasting and
HIV-associated adipose redistribution syndrome (HARS) at the XIV International
AIDS Conference. Subsequently, positive 24-week results of Serostim(R) in HARS
were announced at ICAAC on September 30.
On October 2, Serono announced the implementation of the new Serostim(R) Secured
Distribution program in order to maintain the integrity of the product,
providing the ability to track each individual box of Serostim(R) from Serono to
the contracted network pharmacy.
REGIONAL SALES
North American sales grew by 26.1% to $118.3m (2001: $93.8m). European sales
increased by 21.8% to $152.5m (2001: $125.3m). Sales in the Middle East, Africa
and Eastern Europe were up 32.1% to $24.7m (2001: $18.7m), and up 26.4% in
Oceania to $5.9m. Economic conditions in Latin America, particularly in Brazil,
affecting currency as well as demand, caused a fall in third quarter sales of
22.3% to $26.0m.
-more-
MAJOR AGREEMENTS SIGNED
Serono received an exclusive license from Genentech on August 8, 2002 to market
Raptiva(TM) (efalizumab) in moderate-to-severe psoriasis internationally outside
of the United States, Japan, and certain other Asian countries. On September
17th, Serono confirmed that it plans to submit a marketing authorization
application in Europe for Raptiva(TM) during the first quarter of 2003,
following the announcement by Genentech and XOMA of positive and consistent
results in a third Phase III efficacy trial.
On July 23, Serono signed an exclusive worldwide agreement with AstraZeneca by
which Serono has the rights to develop, register and market the aromatase
inhibitor anastrozole in ovulation induction and improvement of follicular
development. Phase II in this indication is due to start in the fourth quarter.
On September 23, Serono announced that its cash offers for Genset had been
successful. This acquisition enhances our capabilities in genetics to identify
and validate new targets and therapeutic proteins. As a result of the offers in
France and the United States which closed on September 12, Serono holds 85.9% of
the capital and voting rights of Genset (86.6% on a diluted basis). This result
satisfies the offers' minimum tender condition of two thirds of the capital and
voting rights of Genset on a diluted basis. In order to enable Genset
shareholders who have not yet tendered their securities to participate, Serono
reopened the offers for a subsequent period which will expire on October 31,
2002.
SHARE BUY BACK
On July 15 Serono announced a share buy back program for the repurchase of
bearer shares up to a value of CHF 500m over a three year period. As of
September 30, 195,670 shares had been purchased on the open market, representing
CHF152.2m of the authorised amount.
OUTLOOK FOR THE FULL YEAR 2002
Taking into consideration results and licensing activities to date, prevailing
economic conditions and the acquisition of Genset, our guidance for the full
year remains at total product sales growth greater than 10% in local currencies
and net income growth of around 10%.
R&D DAY
We will be providing an update of our activities at our R&D Days in London on
December 2nd and in New York on December 4th. The meeting in London will be
webcast.
-more-
CONFERENCE CALL AND WEBCAST
Serono will hold a conference call today, October 23, 2002, starting 15.00
Central European Time (9.00 A.M. Eastern Daylight Time) during which Serono
Management will present the Company's Third Quarter 2002 Results. To join the
telephone conference please dial 091 610 4111 (from Switzerland), 0207 866 4111
(from the UK), +41 91 610 4111 (from the rest of Europe) and 1 412 858 4600
(from the US). Telephone playback will be available one hour after the
conference call and until close of business CET on Friday October 25. To access
this playback please dial the following numbers: 091 612 4330 (from
Switzerland), +41 91 612 4330 (from Europe) and +1 412 858 1440 (from the US)
and enter the PIN code 242# from a touch tone telephone.
The event will also be relayed by live audio webcast which interested parties
may access via Serono's Corporate home page, www.serono.com. A link to the
webcast will be provided immediately prior to the event. Additionally, the
webcast will be available for replay until close of business on 06 November
2002.
###
Some of the statements in this press release are forward looking. Such
statements are inherently subject to known and unknown risks, uncertainties and
other factors that may cause actual results, performance or achievements of
Serono S.A. and affiliates to be materially different from those expected or
anticipated in the forward-looking statements. Forward-looking statements are
based on Serono's current expectations and assumptions, which may be affected by
a number of factors, including those discussed in this press release and more
fully described in Serono's Annual Report on Form 20-F filed with the U.S.
Securities and Exchange Commission on May 21, 2002. These factors include any
failure or delay in Serono's ability to develop new products, any failure to
receive anticipated regulatory approvals, any problems in commercializing
current products as a result of competition or other factors, our ability to
obtain reimbursement coverage for our products, and government regulations
limiting our ability to sell our products. Serono has no responsibility to
update the forward-looking statements contained in this press release to reflect
events or circumstances occurring after the date of this press release.
###
ABOUT SERONO
Serono is a global biotechnology leader. The Company has six recombinant
products on the market, Gonal-F(R), Luveris(R), Ovidrel(R)/Ovitrelle(R),
Rebif(R), Serostim(R) and Saizen(R) (Luveris(R) is not approved in the USA). In
addition to being the world leader in reproductive health, Serono has strong
market positions in neurology, metabolism and growth. The Company's research
programs are focused on growing these businesses and on establishing new
therapeutic areas. Currently, there are seventeen new molecules in development.
In 2001, Serono achieved worldwide revenues of US$1.38 billion, and a net income
of US$317 million, making it the third largest biotech company in the world
based on revenues. The Company operates in 45 countries, and its products are
sold in over 100 countries. Bearer shares of Serono S.A., the holding company,
are traded on the virt-x (SEO) and its American Depositary Shares are traded on
the New York Stock Exchange (SRA).
-more-
For more information, please contact:
Serono in Geneva, Switzerland:
Media Relations: Investor Relations:
Tel: +41-22-739 36 00 Tel: +41-22-739 36 01
Fax: +41-22-739 30 85 Fax: +41-22-739 30 22
http://www.serono.com Reuters: SEOZ.VX / SRA.N
--------------------- Bloomberg: SEO VX / SRA US
Serono, Inc., Rockland,
MA
Media Relations:
Tel. +1 781 681 2340
Fax: +1 781 681 2935
http://www.seronousa.com
-------------------------
On the following pages, there are:
- Tables detailing sales in dollars and local currencies by therapeutic
area, geographic region and the top 10 products for the 3 and 9 months
ended September 30, 2002 and 2001.
- The unaudited consolidated financial statements for the 3 and 9 months
ended September 30, 2002 and 2001, including income statements,
balance sheets and statements of cash flows, prepared in accordance
with International Accounting Standards (I.A.S.).
-more-
SALES BY THERAPEUTIC AREA
-------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2002 SEPTEMBER 30, 2001
$ MILLION % OF SALES % CHANGE $ % CHANGE L/C $ MILLION % OF SALES
--------------------------------------------------------------------------------------------------
Reproductive Health 147.7 42.3% 21.5% 16.4% 121.5 41.1%
Multiple Sclerosis 139.4 39.9% 46.1% 35.4% 95.4 32.3%
AIDS Wasting 24.4 7.0% (32.6%) (32.6%) 36.1 12.2%
Growth 29.0 8.3% 1.7% (4.6%) 28.5 9.7%
Others 8.9 2.5% (35.7%) (37.8%) 13.9 4.7%
------------------------------------------------------------------------
Total sales (US$ million) $ 349.3 100% 18.2% 12.1% $ 295.4 100%
SALES BY GEOGRAPHIC REGION
--------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2002 SEPTEMBER 30, 2001
$ MILLION % OF SALES % CHANGE $ % CHANGE L/C $ MILLION % OF SALES
--------------------------------------------------------------------------------------------------
Europe 152.5 43.7% 21.8% 8.9% 125.3 42.4%
North America 118.3 33.9% 26.1% 26.2% 93.8 31.8%
Latin America 26.0 7.5% (22.3%) (22.3%) 33.5 11.3%
Others 52.5 14.9% 22.3% 18.1% 42.8 14.5%
------------------------------------------------------------------------
Total sales (US$ million) $ 349.3 100% 18.2% 12.1% $ 295.4 100%
SALES BY THERAPEUTIC AREA
-------------------------
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2002 SEPTEMBER 30, 2001
$ MILLION % OF SALES % CHANGE $ % CHANGE L/C $ MILLION % OF SALES
--------------------------------------------------------------------------------------------------
Reproductive Health 456.1 45.0% 8.7% 7.9% 419.5 46.1%
Multiple Sclerosis 377.3 37.2% 40.2% 37.2% 269.1 29.5%
AIDS Wasting 68.6 6.8% (30.3%) (30.2%) 98.3 10.8%
Growth 88.0 8.7% 12.3% 10.7% 78.4 8.6%
Others 23.7 2.3% (48.0%) (48.6%) 45.7 5.0%
------------------------------------------------------------------------
Total sales (US$ million) $1'013.7 100% 11.3% 10.0% $ 911.0 100%
SALES BY GEOGRAPHIC REGION
--------------------------
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2002 SEPTEMBER 30, 2001
$ MILLION % OF SALES % CHANGE $ % CHANGE L/C $ MILLION % OF SALES
--------------------------------------------------------------------------------------------------
Europe 442.6 43.7% 13.8% 10.8% 388.8 42.7%
North America 333.7 32.9% 12.7% 13.0% 296.1 32.5%
Latin America 83.4 8.2% (10.0%) (10.0%) 92.7 10.2%
Others 154.0 15.2% 15.4% 14.7% 133.4 14.6%
------------------------------------------------------------------------
Total sales (US$ million) $1'013.7 100% 11.3% 10.0% $ 911.0 100%
-more-
--------------------------------------------------------------------------------------------------
TOP TEN PRODUCTS
--------------------------------------------------------------------------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2002 SEPTEMBER 30, 2001
---------------------------------------------------------------------------
* TA $ MILLION % OF SALES % CHANGE $ % CHANGE L/C $ MILLION % OF SALES
Rebif(R) MS 139.4 39.9% 46.1% 35.4% 95.4 32.3%
Gonal-F(R) RH 104.5 29.9% 22.7% 17.3% 85.2 28.8%
Saizen(R) Growth 29.0 8.3% 1.7% (4.6%) 28.5 9.7%
Serostim(R) Wasting 24.4 7.0% (32.6%) (32.6%) 36.1 12.2%
Pergonal(R) RH 12.0 3.4% 32.4% 31.9% 9.1 3.1%
Metrodin HP(R) RH 11.4 3.3% (23.1%) (27.2%) 14.8 5.0%
Profasi(R) RH 4.7 1.3% (10.8%) (13.4%) 5.2 1.8%
Cetrotide(R) RH 4.6 1.3% 61.5% 52.0% 2.9 1.0%
Crinone(R) RH 4.0 1.1% 606.4% 598.3% (0.8) (0.3%)
Stilamin(R) Other 3.8 1.1% 5.9% 2.6% 3.6 1.2%
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2002 SEPTEMBER 30, 2001
---------------------------------------------------------------------------
* TA $ MILLION % OF SALES % CHANGE $ % CHANGE L/C $ MILLION % OF SALES
Rebif(R) MS 377.3 37.2% 40.2% 37.2% 269.1 29.5%
Gonal-F(R) RH 329.2 32.5% 9.4% 8.4% 300.8 33.0%
Saizen(R) Growth 88.0 8.7% 12.3% 10.7% 78.4 8.6%
Serostim(R) Wasting 68.6 6.8% (30.3%) (30.2%) 98.3 10.8%
Metrodin HP(R) RH 39.7 3.9% (20.2%) (20.2%) 49.8 5.5%
Pergonal(R) RH 32.7 3.2% 25.0% 25.0% 26.2 2.9%
Profasi(R) RH 14.8 1.5% (14.6%) (14.9%) 17.3 1.9%
Cetrotide(R) RH 12.9 1.3% 93.7% 89.7% 6.7 0.7%
Stilamin(R) Other 10.2 1.0% (14.3%) (15.0%) 11.9 1.3%
Crinone(R) RH 7.8 0.8% 140.3% 140.3% 3.3 0.4%
* THERAPEUTIC AREAS
RH = Reproductive Health Wasting = AIDS Wasting
MS = Multiple Sclerosis Growth = Growth Retardation
-more-
CONSOLIDATED INCOME STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30 2002 * % OF 2001 * % OF
US$'000 SALES % CHANGE US$'000 SALES
REVENUES
Product sales 349'334 100.0% 18.2% 295'441 100.0%
Royalty and license income 33'168 25.4% 26'458
------------------------------------------------------------------------------------------
TOTAL REVENUES 382'502 18.8% 321'899
------------------------------------------------------------------------------------------
Operating Expenses
Cost of product sales 58'631 16.8% 17.1% 50'056 16.9%
Selling, general and administrative 122'185 35.0% 17.4% 104'066 35.2%
Research and development 101'312 29.0% 28.6% 78'810 26.7%
Other operating expense, net 23'505 6.7% 21.8% 19'299 6.5%
------------------------------------------------------------------------------------------
Total Operating Expenses 305'633 87.5% 21.2% 252'231 85.4%
------------------------------------------------------------------------------------------
OPERATING INCOME 76'869 22.0% 10.3% 69'668 23.6%
------------------------------------------------------------------------------------------
Financial income, net 13'192 39.7% 9'446
Other expense, net 656 396
------------------------------------------------------------------------------------------
Total Non Operating Income, Net 12'536 9'050
------------------------------------------------------------------------------------------
Income Before Taxes and Minority Interests 89'405 25.6% 13.6% 78'718 26.6%
------------------------------------------------------------------------------------------
Taxes 14'751 14'957
------------------------------------------------------------------------------------------
Income Before Minority Interests 74'654 63'761
------------------------------------------------------------------------------------------
Minority interests 117 (13)
------------------------------------------------------------------------------------------
NET INCOME 74'537 21.3% 16.9% 63'774 21.6%
------------------------------------------------------------------------------------------
* Unaudited
2002 % CHANGE 2001
Basic Earnings per Share (in U.S. dollars)
----------------------------------------------------- ------------------
- Bearer shares 4.68 17.8% 3.97
----------------------------------------------------- ------------------
- Registered shares 1.87 17.8% 1.59
----------------------------------------------------- ------------------
- American depositary shares 0.12 17.8% 0.10
----------------------------------------------------- ------------------
Diluted Earnings per Share (in U.S. dollars)
----------------------------------------------------- ------------------
- Bearer shares 4.67 18.0% 3.96
----------------------------------------------------- ------------------
- Registered shares 1.87 18.0% 1.58
----------------------------------------------------- ------------------
- American depositary shares 0.12 18.0% 0.10
----------------------------------------------------- ------------------
Basic earnings per share are calculated in accordance with IAS 33
(Earnings per Share) by dividing the net income of the group, US$74.5
million (2001 US$63.8 million), by an appropriate number of shares.
This is 11,532,883 bearer shares (2001 11,661,027) and 11,013,040
registered shares (2001 11,013,040). The total weighted average
equivalent number of bearer shares is 15,938,099 (2001 16,066,243) for
the three months ended September 30, 2002. As each American depositary
share represents ownership interest in one fortieth of a bearer share,
basic and diluted earnings per American depositary share is calculated
as one fortieth of the earnings per bearer share.
For diluted earnings per share, the total number of bearer shares is
adjusted to assume conversion of all share options granted to
employees and directors. The number of bearer shares used to calculate
diluted earnings per share is 11,544,653 (2001 11,695,277).
-more-
CONSOLIDATED INCOME STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30 2002 * % OF 2001 * % OF
US$'000 SALES % CHANGE US$'000 SALES
REVENUES
Product sales 1'013'701 100.0% 11.3% 910'966 100.0%
Royalty and license income 90'745 (9.1%) 99'879
----------------------------------------------------------------------------------------------
TOTAL REVENUES 1'104'446 9.3% 1'010'845
----------------------------------------------------------------------------------------------
Operating Expenses
Cost of product sales 158'584 15.6% (1.6%) 161'175 17.7%
Selling, general and administrative 364'077 35.9% 13.7% 320'242 35.2%
Research and development 262'681 25.9% 14.9% 228'519 25.1%
Other operating expense, net 58'063 5.7% 13.1% 51'360 5.6%
----------------------------------------------------------------------------------------------
Total Operating Expenses 843'405 83.2% 10.8% 761'296 83.6%
----------------------------------------------------------------------------------------------
OPERATING INCOME 261'041 25.8% 4.6% 249'549 27.4%
----------------------------------------------------------------------------------------------
Financial income, net 27'324 (43.6%) 48'437
Other expense, net 1'833 1'826
----------------------------------------------------------------------------------------------
Total Non Operating Income, Net 25'491 46'611
----------------------------------------------------------------------------------------------
Income Before Taxes and Minority Interests 286'532 28.3% (3.3%) 296'160 32.5%
----------------------------------------------------------------------------------------------
Taxes 47'278 56'270
----------------------------------------------------------------------------------------------
Income Before Minority Interests 239'254 239'890
----------------------------------------------------------------------------------------------
Minority interests 62 (94)
----------------------------------------------------------------------------------------------
NET INCOME 239'192 23.6% (0.3%) 239'984 26.3%
----------------------------------------------------------------------------------------------
* Unaudited
2002 % CHANGE 2001
Basic Earnings per Share (in U.S. dollars)
------------------------------------------------------- --------------------
- Bearer shares 14.92 (0.1%) 14.94
------------------------------------------------------- --------------------
- Registered shares 5.97 (0.1%) 5.98
------------------------------------------------------- --------------------
- American depositary shares 0.37 (0.1%) 0.37
------------------------------------------------------- --------------------
Diluted Earnings per Share (in U.S. dollars)
------------------------------------------------------- --------------------
- Bearer shares 14.90 (0.0%) 14.91
------------------------------------------------------- --------------------
- Registered shares 5.96 (0.0%) 5.96
------------------------------------------------------- --------------------
- American depositary shares 0.37 (0.0%) 0.37
------------------------------------------------------- --------------------
Basic earnings per share are calculated in accordance with IAS 33
(Earnings per Share) by dividing the net income of the group, US$239.2
million (2001 US$240.0 million), by an appropriate number of shares.
This is 11,625,344 bearer shares (2001 11,659,064) and 11,013,040
registered shares (2001 11,013,040). The total weighted average
equivalent number of bearer shares is 16,030,560 (2001 16,064,280) for
the nine months ended September 30, 2002. As each American depositary
share represents ownership interest in one fortieth of a bearer share,
basic and diluted earnings per American depositary share is calculated
as one fortieth of the earnings per bearer share.
For diluted earnings per share, the total number of bearer shares is
adjusted to assume conversion of all share options granted to
employees and directors. The number of bearer shares used to calculate
diluted earnings per share is 11,643,162 (2001 11,691,075).
-more-
CONSOLIDATED BALANCE SHEETS
As of SEPTEMBER 30, 2002 * December 31, 2001
US$ 000 US$ 000
ASSETS
Current Assets
Cash and cash equivalents 586'051 1'131'091
Short-term investments 340'804 344'413
Trade accounts receivable 275'763 234'490
Inventories 243'014 196'063
Prepaid expenses 39'493 21'857
Other current assets 193'815 134'955
---------------------------------------------------------------------------------------------------------
Total Current Assets 1'678'940 2'062'869
---------------------------------------------------------------------------------------------------------
Long-term Assets
Property, plant and equipment 511'696 460'767
Intangible assets 200'245 110'615
Long-term financial assets 778'958 241'009
Deferred tax assets 107'948 107'115
Other long-term assets 44'749 36'394
---------------------------------------------------------------------------------------------------------
Total Long-Term Assets 1'643'596 955'900
---------------------------------------------------------------------------------------------------------
TOTAL ASSETS 3'322'536 3'018'769
---------------------------------------------------------------------------------------------------------
LIABILITIES
Current Liabilities
Bank advances 89'647 154'295
Trade accounts payable 53'895 60'151
Current portion of long-term debt 20'480 18'959
Income taxes 55'300 55'948
Other current liabilities 270'606 246'157
---------------------------------------------------------------------------------------------------------
Total Current Liabilities 489'928 535'510
---------------------------------------------------------------------------------------------------------
Long-Term Liabilities
Long-term debt 32'870 37'325
Deferred tax liabilities 9'382 9'003
Other long-term liabilities 424'756 217'430
---------------------------------------------------------------------------------------------------------
Total Long-Term Liabilities 467'008 263'758
---------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 956'936 799'268
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Minority Interests 5'356 587
---------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Share capital 249'925 252'955
Share premium 879'884 966'295
Retained earnings 1'283'039 1'108'086
Fair value reserves (44'103) (25'135)
Cumulative foreign currency translation adjustments (8'501) (83'287)
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TOTAL SHAREHOLDERS' EQUITY 2'360'244 2'218'914
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TOTAL LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS' EQUITY 3'322'536 3'018'769
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* Unaudited
-more-
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30 2002 * 2001 *
US$ 000 US$ 000
Cash Flows From Operating Activities
Income before taxes and minority interests 286'532 296'160
Depreciation and amortization 74'432 74'566
Financial income (50'644) (64'080)
Financial expense 7'735 10'640
Other non-cash items 656 13'776
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Cash Flows From Operating Activities Before Working Capital Changes 318'711 331'062
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Working Capital Changes
Trade accounts payable, other current liabilities and deferred income 162'574 (7'857)
Trade accounts receivable (22'340) (16'901)
Inventories (8'362) (20'605)
Prepaid expenses and other current assets (22'539) 40'792
Taxes paid (47'985) (29'026)
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Net Cash Flows From Operating Activities 380'059 297'465
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Cash Flows From Investing Activities
Short-term investments 292'249 1'215'763
Acquisition of subsidiary (98'950) -
Intangible and other long-term assets (13'318) (34'921)
Investments in long-term financial assets (843'442) -
Capital expenditures (71'062) (51'967)
Disposals of fixed assets 10'646 9'315
Other non-current liabilities (5'606) 2'151
Interest received 33'141 72'381
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Net Cash Flows From Investing Activities (696'342) 1'212'722
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Cash Flows From Financing Activities
Bank advances (71'909) 8'056
Payments on long-term debt (9'073) (64'036)
Proceeds from issuance of share capital 11'611 -
Proceeds from exercises of stock options 1'384 1'502
Purchase of treasury shares (96'582) (5'579)
Interest paid (5'958) (9'989)
Dividends paid (64'240) (53'759)
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Net Cash Flows From Financing Activities (234'767) (123'805)
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Effect of Exchange Rate Changes on Cash and Cash Equivalents 6'010 1'823
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Net Increase in Cash and Cash Equivalents (545'040) 1'388'205
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Cash and Cash Equivalents
- Beginning of period 1'131'091 223'009
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- End of period 586'051 1'611'214
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* Unaudited
-end-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SERONO S.A.
a Swiss corporation
(Registrant)
October 23, 2002 By: /s/ Jacques Theurillat
------------------------------
Name: Jacques Theurillat
Title: Deputy Chief Executive Officer