18 May 2009

Preliminary results announcement for the year ended 31 March 2009

“Strong growth in revenue, EBITDA and trading profit”

Alliance Boots, the international pharmacy-led health and beauty group, today reports preliminary results for the year ended 31 March 2009 which demonstrate that the Group has continued to perform well in 2008/09, despite the increasingly challenging business environment.

Highlights:

Group

  • Continued strong financial performance
  • Revenue, including share of associates and joint ventures, up 15.5% to £20.5 billion
  • EBITDA, including share of associates and joint ventures, up 11.3% to £1,245 million
  • Trading profit, including share of associates and joint ventures, up 11.6% to £953 million
  • £100 million merger cost synergy target achieved 18 months ahead of schedule
  • Secure financing and robust financial position

Health & Beauty Division

  • Revenue up 4.4% - up 2.9% in constant currency
  • Trading profit up 11.6%
  • Boots UK
    - Revenue up 3.2%
    - Like for like revenue up 1.3%
    - Over 450 stores now trading as “your local Boots pharmacy”
  • Boots Opticians merger with Dollond & Aitchison completed after year end

Pharmaceutical Wholesale Division

  • Challenging markets
  • Revenue up 17.8% - up 3.8% in constant currency
  • Trading profit up 4.4%
  • Division-wide business improvement programme underway
  • Key acquisitions in Germany and France

Associates and joint ventures

  • Share of post tax earnings of associates and joint ventures up 25.0% to £75 million

Cash flow

  • £1,045 million cash generated from operations

To assist in understanding the performance of the Group, all references to year on year performance (unless otherwise stated) are based on comparative pro forma financial information for the year ended 31 March 2008 as if the acquisition of Alliance Boots plc by AB Acquisitions Limited on 26 June 2007 had taken place prior to 31 March 2007.

Financial summary

  £million
Revenue 17,195
EBITDA1 1,096
Underlying depreciation and amortisation2 (255)
Trading profit3 841
Share of post tax earnings of associates and joint ventures 75
Underlying net finance costs4 (705)
Underlying tax credit5 25
Underlying profit6 236

 

A reconciliation of underlying profit to statutory profit for the year is set out below:

  £million
Underlying profit6 236
Amortisation of customer relationships and brands (80)
Net exceptional items before tax7 (58)
IAS 39 timing differences (60)
Tax credit on items not in underlying profit 63
Profit for the year 101

 

1 EBITDA comprises trading profit before underlying depreciation and amortisation.
2 Underlying depreciation and amortisation excludes depreciation and amortisation within exceptional items and amortisation of customer relationships and brands.
3 Trading profit comprises profit from operations before exceptional items, amortisation of customer relationships and brands, and share of post tax earnings of associates and joint ventures.
4 Underlying net finance costs comprise net finance costs adjusted to exclude exceptional items and IAS 39 timing differences.
5 Underlying tax credit excludes tax on exceptional items, amortisation of customer relationships and brands, and IAS 39 timing differences.
6 Underlying profit excludes exceptional items, amortisation of customer relationships and brands, IAS 39 timing differences and related tax.
7 Net exceptional items mainly comprised costs in relation to the Pharmaceutical Wholesale Division restructuring programme, merger synergies and the second phase of integration projects, impairment of goodwill, investment in associate and an available-for-sale investment, and discounts on the repurchase of acquisition borrowings.

Commenting on the results, Stefano Pessina, Executive Chairman, said:

“I am pleased that Alliance Boots has again reported strong growth in revenue, EBITDA and trading profit. This reflects the underlying strength of our two core business activities, the importance of health and wellbeing to both individuals and governments, and the benefits from transforming our Group.

The Group’s financial position remains strong, reflecting a focus on profit generation and working capital management, combined with secure long term funding arrangements. We have a strong cash flow and in addition are benefiting from historically low interest rates.

Since our year end, Alliance Boots has continued to perform well, reflecting the markets in which we operate and the further benefits we are generating through transforming the Group. As a result we remain confident about our prospects for the year ahead.

This is a great Group with great brands and market leading positions in attractive markets. We are fully committed to the development and growth of Alliance Boots and believe that we are on track to become the world’s leading pharmacy-led health and beauty group.”

A glossary of key terms is provided at the end of this announcement.

The Group’s 2008/09 Annual Review, together with the Consolidated Financial Statements, will be published on our website (www.allianceboots.com) on 28 May 2009. In addition, the Group’s Corporate Social Responsibility Report 2008/09 will be published on our website at the end of September 2009.

For further information, please contact:

Alliance Boots
Yves Romestan/Zoe Farthing/Olivia Hall
Tel: +44 (0) 1932 871569

Finsbury
Zoe Watt/Kirsty Flockhart
Tel: +44 (0) 20 7251 3801

ALLIANCE BOOTS PRELIM RESULTS 2008/09 as a PDF -(111 KB) open link in a new window

ALLIANCE BOOTS PRELIM RESULTS 2008/09 as a Word document -(577 KB) open link in a new window

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