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, 2003
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 if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101 (b)(1).) ______
(Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101 (b)(7).) ______
(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 THIRD QUARTER RESULTS
Best Quarter Ever with Net Income up 48.2% to $110.5m
Driven by Strong Revenue Growth
- Guidance for 2003 Confirmed -
GENEVA, SWITZERLAND, OCTOBER 23, 2003 - Serono S.A. (virt-x: SEO and NYSE: SRA)
today reported its third quarter results for the period ended September 30,
2003.
HIGHLIGHTS
- Total revenues of $502.7m, up 32.9% in dollars and underlying growth of
26.0% in local currencies
- Product sales up 32.7% to $463.5m
- Significant growth of leading products in each therapeutic area: Rebif(R)
up 52.1%, Gonal-f(R) up 12.1% and Saizen(R) up 26.9%
- Reported net income of $110.5m, up 48.2% and 39.3% in local currencies
- Basic EPS up 49.2% to $6.98 per Bearer Share and $0.17 per American
Depositary Share
- Positive European CPMP opinion for Gonal-f(R) pre-filled pen injector
- FDA approval and positive European CPMP opinion for Ovidrel(R)/Ovitrelle(R)
pre-filled syringe
- Progress of promising new compounds, oral cladribine and TACI-Ig, into
clinical development
"This has been our best quarter ever, with net income up 48.2% to $110.5m driven
by strong revenue growth in each of our businesses" said Ernesto Bertarelli,
Chief Executive Officer.
"Our operational momentum will result in an excellent 2003, and we are clearly
on track to meet our guidance" said Allan Shaw, Chief Financial Officer.
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FINANCIAL PERFORMANCE
In the third quarter of 2003, total revenues grew by 32.9% to $502.7m (Q3 2002:
$378.2m). Product sales rose 32.7% to $463.5m (Q3 2002: $349.3m). US dollar
weakness caused a positive currency impact of $24.9m on product sales. In local
currencies, product sales grew by 25.4%.
Royalty and license income grew by 36.0% to $39.2m (Q3 2002: $28.8m).
Gross margin was 85.8% (Q3 2002: 83.2%) as a result of operational improvements.
Selling, general and administrative expenses were $158.9m (Q3 2002: $117.8m),
reflecting commercial expenditure and marketing programs.
Research and development expenses increased to $107.1m or 21.3% of total
revenues (Q3 2002: $101.3m or 26.8% of total revenues).
Other operating expenses reached $53.6m (Q3 2002: $23.5m) influenced by
licensing agreements for new products and higher royalties paid to third
parties.
Operating income grew by 52.6% to $117.3m reflecting strong revenue growth and
cost-control management. Net financial income was $9.4m in the third quarter (Q3
2002: $13.2m).
Reported net income grew 48.2% to $110.5m (Q3 2002: $74.5m), or 39.3% in local
currencies.
Reported basic earnings per share (EPS) grew 49.2% to $6.98 per bearer share (Q3
2002: $4.68) and $0.17 per American Depositary Share (ADS) (Q3 2002: $0.12). The
average number of equivalent bearer shares outstanding for the three months
ended September 30, 2003 was 15,829,041.
NEUROLOGY
In the third quarter of 2003, total neurology sales were $222.2m. Rebif(R)
worldwide sales were up 52.1% (41.5% in local currencies) to $212.0m (Q3 2002:
$139.4m). Rebif(R) continued its market leadership outside the USA with sales up
by 33.1% to $161.6m (Q3 2002: $121.4m).
In the USA, Rebif(R) sales grew by 179.8% to $50.4m in the third quarter (Q3
2002: $18.0m) with demand continuing to strengthen. Rebif(R) is the fastest
growing multiple sclerosis (MS) disease modifying drug and continues to gain
market share in the USA.
Novantrone(R) sales in MS were $10.2m in the third quarter (Q2 2003: $6.6m) as
marketing programs gained momentum (total Novantrone(R) sales were $26.3m).
On September 19, new data from a long-term assessment of a cohort of patients
with relapsing-remitting multiple sclerosis (RRMS) on Rebif(R) therapy were
presented at the 19th ECTRIMS Congress. The results support the long-term
benefit of Rebif(R) 44 mcg subcutaneously three times weekly, in the treatment
of RRMS on relapses, disability and magnetic resonance imaging
(MRI) outcomes measured, with a favorable risk benefit profile through eight
years. The exact relationship between MRI findings and clinical outcomes for
patients is unknown. The results also reflect the importance of starting
treatment early.
REPRODUCTIVE HEALTH
In the third quarter, worldwide reproductive health product sales increased by
6.9% to $157.9m (Q3 2002: $147.7m). Sales of Gonal-f(R) grew by 12.1% (5.8% in
local currencies) to $117.1m (Q3 2002: $104.5m).
Serono's core reproductive health portfolio consisting of three recombinant
hormones (Gonal-f(R), Ovidrel(R), Luveris(R)) and two complementary products
(Cetrotide(R), Crinone(R)) grew by 14.8% to $133.4m, or 8.2% in local
currencies. In accordance with our phase out plan, sales of urine-derived
gonadotropin represented only $21.8m (Q3 2002: $28.9m).
Several significant regulatory milestones were achieved. On September 25, the
Committee for Proprietary Medicinal Products (CPMP) issued a positive opinion
for the Gonal-f(R) pre-filled pen injector in Europe. On September 30, an
Advisory Committee of the Food and Drug Administration (FDA) issued a favorable
recommendation for Luveris(R) in Serono's proposed indication of follicular
development in infertile hypogonadotropic hypogonadal women with profound
luteinizing hormone deficiency. On July 24, the CPMP issued a positive opinion
for Ovitrelle(R) pre-filled syringe in Europe. Recently, the Ovidrel(R)
pre-filled syringe was approved by the FDA.
GROWTH AND METABOLISM
Sales of Serono's recombinant growth hormone products rose by 12.2% to $59.9m in
the third quarter (Q3 2002: $53.4m). Saizen(R) sales increased by 26.9% (18.9%
in local currencies) to $36.8m (Q3 2002: $29.0m). The favorable market
acceptance of the Saizen(R) family of devices in the USA and in Europe continue
to make Saizen(R) a popular choice with prescribers and patients. Serostim(R)
sales continue to be stable at $23.0m (Q3 2002: $24.4m). In the USA, the
Serostim(R) Secured Distribution Program, which has been in operation for one
year, has been recently highlighted by staff of the FDA as an outstanding
example of the use of a tracking and tracing technology to assure patient safety
and product integrity.
REGIONAL SALES
Sales performance was strong in all of our geographic areas. In Europe, sales
increased by 25.7% to $191.8m (Q3 2002: $152.5m). Sales in North America grew
strongly by 52.0% to reach $179.8m (Q3 2002: $118.3m). In the rest of the world,
sales grew by 17.1% to $91.9m (Q3 2002: $78.5m).
more
R&D NEWS
In the third quarter of 2003, progress was made in product development and the
following molecules moved into Phase 1 clinical development:
- Cladribine, potentially the first oral treatment for multiple sclerosis
- TACI-Ig, a fusion protein inhibitor of B-cell activation, which represents
a novel therapeutic approach to treating autoimmune diseases such as
systemic lupus erythematosus, rheumatoid arthritis, and potentially other
diseases such as non-Hodgkin's lymphoma.
INVESTOR MEETINGS
Serono's senior management will be presenting a company update in Zurich, London
and New York on October 24, 27 and 28, 2003 respectively. The Zurich meeting
will be webcast.
CONFERENCE CALL AND WEBCAST
Serono will hold a conference call today, October 23, 2003, starting at 3.00 pm
Central European Time (9.00 am U.S. Eastern Time) during which Serono management
will present the Company's third quarter 2003 results. To join the telephone
conference please dial 091 610 5600 (from Switzerland), 0207 107 0611 (from the
UK), 1 866 291 4166 (from the USA) and +41 91 610 5600 (from elsewhere).
Telephone playback will be available one hour after the conference call and
until close of business 6.00 pm CET on October 30, 2003. To access this playback
please dial the following numbers: 091 612 4330 (from Switzerland), 0207 866
4300 (from the UK), 1 412 858 1440 (from the USA) and +41 91 612 4330 (from
elsewhere) and enter the PIN code 303# from a touch tone telephone.
The event will also be relayed by live audio webcast that 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, and accompanying slides will be
made available for download approximately 1 hour before the beginning of the
webcast. Additionally, the webcast will be available for replay until close of
business on November 15, 2003.
###
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 April 17, 2003. 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.
###
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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 over 30 projects in development.
Serono was awarded the International James D. Watson Helix 2003 Award from the
Biotechnology Industry Organization (BIO) in recognition of the Company's
outstanding leadership and highest standards of scientific and product
achievement.
In 2002, Serono achieved worldwide revenues of US$ 1.538 billion, and a net
income of US$321 million, making it the third largest biotech company in the
world. The Company operates in 44 countries, and its products are sold in 94
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).
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: INVESTOR RELATIONS:
Tel. +1 781 681 2340 Tel. +1 781 681 2552
Fax: +1 781 681 2935 Fax: +1 781 681 2912
http://www.seronousa.com
------------------------
On the following pages, there are:
- Tables detailing sales in dollars by therapeutic area, geographic
region and the top 10 products for the 3 and 9 months ended September
30, 2003.
- The unaudited consolidated financial statements for the 3 and 9 months
ended September 30, 2003, including income statements, balance sheets
and statements of cash flows, prepared in accordance with
International Financial Reporting Standards (IFRS).
more
SALES BY THERAPEUTIC AREA
-------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
$MILLION % OF SALES % CHANGE $ $MILLION % OF SALES
------------------------------------------------------------------------------------
Neurology 222.2 47.9% 59.4% 139.4 39.9%
Reproductive Health 157.9 34.1% 6.9% 147.7 42.3%
Growth & Metabolism 59.9 12.9% 12.2% 53.4 15.3%
Others 23.5 5.1% 164.9% 8.8 2.5%
------------------------------------------------------------------------------------
Total sales (US$ million) $ 463.5 100% 32.7% $ 349.3 100%
SALES BY GEOGRAPHIC REGION
--------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
$MILLION % OF SALES % CHANGE $ $MILLION % OF SALES
-----------------------------------------------------------------------------------
Europe 191.8 41.4% 25.7% 152.5 43.7%
North America 179.8 38.8% 52.0% 118.3 33.9%
Latin America 28.5 6.1% 9.4% 26.0 7.5%
Others 63.4 13.7% 20.9% 52.5 14.9%
-----------------------------------------------------------------------------------
Total sales (US$million) $ 463.5 100% 32.7% $ 349.3 100%
SALES BY THERAPEUTIC AREA
-------------------------
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
$MILLION % OF SALES % CHANGE $ $MILLION % OF SALES
------------------------------------------------------------------------------------
Neurology 608.1 45.4% 61.2% 377.3 37.2%
Reproductive Health 501.9 37.5% 10.0% 456.1 45.0%
Growth & Metabolism 175.1 13.1% 11.8% 156.6 15.5%
Others 53.6 4.0% 126.5% 23.7 2.3%
------------------------------------------------------------------------------------
Total sales (US$ million) $1,338.7 100% 32.1% $1,013.7 100%
SALES BY GEOGRAPHIC REGION
--------------------------
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
------------------------------------------------------------------------------------
$MILLION % OF SALES % CHANGE $ $MILLION % OF SALES
Europe 580.9 43.4% 31.2% 442.6 43.7%
North America 501.6 37.5% 50.3% 333.7 32.9%
Latin America 69.4 5.2% (16.8%) 83.4 8.2%
Others 186.8 13.9% 21.4% 154.0 15.2%
------------------------------------------------------------------------------------
Total sales (US$ million) $1,338.7 100% 32.1% $1,013.7 100%
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TOP TEN PRODUCTS
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
---------------------------------------------------------
* TA $MILLION % OF SALES % CHANGE $ $MILLION % OF SALES
Rebif (R) MS 212.0 45.7% 52.1% 139.4 39.9%
Gonal-F (R) RH 117.1 25.3% 12.1% 104.5 29.9%
Saizen (R) Growth 36.8 7.9% 26.9% 29.0 8.3%
Novantrone (R) MS/Oncology 26.3 5.7% 100.0% --
Serostim (R) Wasting 23.0 5.0% (5.4%) 24.4 7.0%
Pergonal (R) RH 11.8 2.5% (2.0%) 12.0 3.4%
Cetrotide (R) RH 5.6 1.2% 21.4% 4.6 1.3%
Metrodin HP (R) RH 5.2 1.1% (54.4%) 11.4 3.3%
Crinone (R) RH 5.2 1.1% 28.6% 4.0 1.1%
Profasi (R) RH 4.1 0.9% (11.2%) 4.7 1.3%
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
---------------------------------------------------------
* TA $MILLION % OF SALES % CHANGE $ $MILLION % OF SALES
Rebif (R) MS 586.2 43.8% 55.4% 377.3 37.2%
Gonal-F (R) RH 378.6 28.3% 15.0% 329.2 32.5%
Saizen (R) Growth 109.2 8.2% 24.0% 88.0 8.7%
Serostim (R) Wasting 65.9 4.9% (3.8%) 68.6 6.8%
Novantrone (R) MS/Oncology 54.7 4.1% 100.0% --
Pergonal (R) RH 33.9 2.5% 3.7% 32.7 3.2%
Metrodin HP (R) RH 19.5 1.5% (50.9%) 39.7 3.9%
Cetrotide (R) RH 17.1 1.3% 32.3% 12.9 1.3%
Crinone (R) RH 14.4 1.1% 84.1% 7.8 0.8%
Profasi (R) RH 12.9 1.0% (12.9%) 14.8 1.5%
* THERAPEUTIC AREAS
RH = Reproductive Health Wasting = AIDS Wasting
MS = Multiple Sclerosis Growth = Growth Retardation
Oncology = Oncology
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CONSOLIDATED INCOME STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30 2003 * % OF 2002 * % of
US$'000 REVENUES % change US$'000 Revenues
Revenues
Product sales 463,533 32.7% 349,334
Royalty and license income 39,187 36.0% 28,821
-----------------------------------------------------------------------------------------------
TOTAL REVENUES 502,720 100.0% 32.9% 378,155 100.0%
-----------------------------------------------------------------------------------------------
Operating Expenses
Cost of product sales 65,753 12.1% 58,631
% of Sales 14.2% 16.8%
Selling, general and administrative 158,919 31.6% 34.9% 117,838 31.2%
Research and development 107,102 21.3% 5.7% 101,312 26.8%
Other operating expense, net 53,621 10.7% 128.1% 23,505 6.2%
-----------------------------------------------------------------------------------------------
Total Operating Expenses 385,395 76.7% 27.9% 301,286 79.7%
-----------------------------------------------------------------------------------------------
OPERATING INCOME 117,325 23.3% 52.6% 76,869 20.3%
-----------------------------------------------------------------------------------------------
Financial income, net 9,412 (28.7%) 13,192
Other income/(expense), net 62 109.5% (656)
-----------------------------------------------------------------------------------------------
Total Non Operating Income, Net 9,474 12,536
-----------------------------------------------------------------------------------------------
Income Before Taxes and Minority Interests 126,799 25.2% 41.8% 89,405 23.6%
Taxes 17,011 14,751
-----------------------------------------------------------------------------------------------
Income Before Minority Interests 109,788 74,654
Minority interests (666) 117
-----------------------------------------------------------------------------------------------
NET INCOME 110,454 22.0% 48.2% 74,537 19.7%
-----------------------------------------------------------------------------------------------
Comparative figures have been reclassified to conform with current year's presentation
* Unaudited
2003 2002 % CHANGE
Basic Earnings per Share (in U.S. dollars)
- Bearer shares 6.98 4.68 49.2%
-------------------------------------------- ---- ---- --------
- Registered shares 2.79 1.87 49.2%
-------------------------------------------- ---- ---- --------
- American depositary shares 0.17 0.12 49.2%
-------------------------------------------- ---- ---- --------
Diluted Earnings per Share (in U.S. dollars)
- Bearer shares 6.96 4.67 49.0%
-------------------------------------------- ---- ---- --------
- Registered shares 2.78 1.87 49.0%
-------------------------------------------- ---- ---- --------
- American depositary shares 0.17 0.12 49.0%
-------------------------------------------- ---- ---- --------
Basic earnings per share are calculated in accordance with IAS 33 (Earnings per
Share) by dividing the net income of the group, US$110.5 million (2002 US$74.5
million), by an appropriate number of shares. This is 11,423,825 bearer shares
(2002 11,532,883) and 11,013,040 registered shares (2002 11,013,040). The total
weighted average equivalent number of bearer shares is 15,829,041 (2002
15,938,099) for the three months ended September 30, 2003. As each American
depositary share represents ownership interest in one fortieth of a bearer
share, basic and diluted earnings per American depositary share is calculated as
one fortieth of the earnings per bearer share.
For diluted earnings per share, the total number of bearer shares is adjusted to
assume conversion of all share options granted to employees and directors. The
number of bearer shares used to calculate diluted earnings per share is
11,459,401 (2002 11,544,653).
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CONSOLIDATED INCOME STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30 2003 * % OF 2002 * % of
US$'000 REVENUES % change US$'000 Revenues
Revenues
Product sales 1,338,733 32.1% 1,013,701
Royalty and license income 114,820 32.9% 86,398
------------------------------------------ ---------- --------- --------- ---------- ---------
TOTAL REVENUES 1,453,553 100.0% 32.1% 1,100,099 100.0%
------------------------------------------ ---------- --------- --------- ---------- ---------
Operating Expenses
Cost of product sales 199,201 25.6% 158,584
% of Sales 14.9% 15.6%
Selling, general and administrative 457,959 31.5% 27.3% 359,730 32.7%
Research and development 343,571 23.6% 30.8% 262,681 23.9%
Other operating expense, net 150,320 10.3% 158.9% 58,063 5.3%
------------------------------------------ ---------- --------- --------- ---------- ---------
Total Operating Expenses 1,151,051 79.2% 37.2% 839,058 76.3%
------------------------------------------ ---------- --------- --------- ---------- ---------
OPERATING INCOME 302,502 20.8% 15.9% 261,041 23.7%
------------------------------------------ ---------- --------- --------- ---------- ---------
Financial income, net 24,816 (9.2%) 27,324
Other income/(expense), net 429 123.4% (1,833)
------------------------------------------ ---------- --------- --------- ---------- ---------
Total Non Operating Income, Net 25,245 25,491
------------------------------------------ ---------- --------- --------- ---------- ---------
Income Before Taxes and Minority Interests 327,747 22.5% 14.4% 286,532 26.0%
Taxes 49,162 47,278
------------------------------------------ ---------- --------- --------- ---------- ---------
Income Before Minority Interests 278,585 239,254
Minority interests 235 62
------------------------------------------ ---------- --------- --------- ---------- ---------
NET INCOME 278,350 19.1% 16.4% 239,192 21.7%
------------------------------------------ ---------- --------- --------- ---------- ---------
Comparative figures have been reclassified to conform with current year's presentation
* Unaudited
2003 2002 % CHANGE
Basic Earnings per Share (in U.S. dollars)
- Bearer shares 17.58 14.92 17.8%
-------------------------------------------- ----- ----- -------
- Registered shares 7.03 5.97 17.8%
-------------------------------------------- ----- ----- -------
- American depositary shares 0.44 0.37 17.8%
-------------------------------------------- ----- ----- -------
Diluted Earnings per Share (in U.S. dollars)
- Bearer shares 17.55 14.90 17.8%
-------------------------------------------- ----- ----- -------
- Registered shares 7.02 5.96 17.8%
-------------------------------------------- ----- ----- -------
- American depositary shares 0.44 0.37 17.8%
-------------------------------------------- ----- ----- -------
Basic earnings per share are calculated in accordance with IAS 33 (Earnings per
Share) by dividing the net income of the group, US$278.3 million (2002 US$239.2
million), by an appropriate number of shares. This is 11,429,052 bearer shares
(2002 11,625,344) and 11,013,040 registered shares (2002 11,013,040). The total
weighted average equivalent number of bearer shares is 15,834,268 (2002
16,030,560) for the nine months ended September 30, 2003. 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
11,450,658 (2002 11,643,162).
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CONSOLIDATED BALANCE SHEETS
As of SEPTEMBER 30, 2003 * December 31, 2002
US$000 US$000
ASSETS
Current Assets
Cash and cash equivalents 661,930 686,033
Short-term financial assets 437,796 378,865
Trade accounts receivable 311,414 257,313
Inventories 305,021 259,477
Prepaid expenses 33,021 26,609
Other current assets 182,683 208,100
-------------------------------------------------------------- --------------------- ------------------
Total Current Assets 1,931,865 1,816,397
-------------------------------------------------------------- --------------------- ------------------
Long-Term Assets
Property, plant and equipment 634,743 554,509
Long-term financial assets 871,302 711,201
Intangible assets 249,395 230,117
Deferred tax assets 176,585 136,687
Other long-term assets 37,753 45,763
-------------------------------------------------------------- --------------------- ------------------
Total Long-Term Assets 1,969,778 1,678,277
-------------------------------------------------------------- --------------------- ------------------
TOTAL ASSETS 3,901,643 3,494,674
-------------------------------------------------------------- --------------------- ------------------
LIABILITIES
Current Liabilities
Bank advances 36,902 70,093
Trade accounts payable 52,064 60,591
Current portion of long-term debt 19,422 23,505
Income taxes 29,687 55,152
Deferred income - current 32,766 18,221
Other current liabilities 396,443 330,483
-------------------------------------------------------------- --------------------- ------------------
Total Current Liabilities 567,284 558,045
-------------------------------------------------------------- --------------------- ------------------
Long-term Liabilities
Long-term debt 63,963 25,857
Deferred tax liabilities 11,800 12,080
Deferred income - non-current 201,205 183,659
Provisions and other long-term liabilities 335,301 252,670
-------------------------------------------------------------- --------------------- ------------------
Total Long-Term Liabilities 612,269 474,266
-------------------------------------------------------------- --------------------- ------------------
Total Liabilities 1,179,553 1,032,311
-------------------------------------------------------------- --------------------- ------------------
-------------------------------------------------------------- --------------------- ------------------
Minority Interests 1,465 1,165
-------------------------------------------------------------- --------------------- ------------------
SHAREHOLDERS' EQUITY
Share capital 253,882 253,416
Share premium 1,002,752 989,141
Treasury shares (140,253) (126,460)
Retained earnings 1,557,993 1,364,626
Fair value reserves (26,193) (44,807)
Cumulative foreign currency translation adjustments 72,444 25,282
-------------------------------------------------------------- --------------------- ------------------
Total Shareholders' Equity 2,720,625 2,461,198
-------------------------------------------------------------- --------------------- ------------------
-------------------------------------------------------------- --------------------- ------------------
Total Liabilities, Minority Interests and Shareholders' Equity 3,901,643 3,494,674
-------------------------------------------------------------- --------------------- ------------------
* Unaudited
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CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30 2003 * 2002 *
US$000 US$000
Cash Flows From Operating Activities
Income before taxes and minority interests 327,747 286,532
Depreciation and amortization 100,849 74,432
Financial income (37,077) (50,644)
Financial expense 13,720 7,735
Other non-cash items 23,503 656
--------------------------------------------------------------------- --------- ----------
Cash Flows From Operating Activities Before Working Capital Changes 428,742 318,711
--------------------------------------------------------------------- --------- ----------
Working Capital Changes
Trade accounts payable, other current liabilities and deferred income 72,346 162,574
Trade accounts receivable (45,036) (22,340)
Inventories (48,785) (8,362)
Prepaid expenses and other current assets 12,596 (22,539)
Taxes paid (67,697) (47,985)
--------------------------------------------------------------------- --------- ----------
NET CASH FLOWS FROM OPERATING ACTIVITIES 352,166 380,059
--------------------------------------------------------------------- --------- ----------
Cash Flows From Investing Activities
Acquisition of subsidiary -- (98,950)
Purchase of property, plant and equipment (125,323) (71,062)
Purchase of intangible and other long-term assets (6,842) (13,318)
Purchase of financial assets (208,443) (551,193)
Other non-current liabilities (10,204) (5,606)
Proceeds from sale of property, plant and equipment 8,804 10,646
Interest received 53,988 33,141
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Net Cash Flows From Investing Activities (288,020) (696,342)
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Cash Flows From Financing Activities
Proceeds from issuance of share capital 13,105 11,611
Proceeds from exercises of stock options 7,651 1,384
Premiums received on written calls 1,249 --
Purchase of treasury shares (24,637) (96,582)
Repayment of bank advances (30,812) (71,909)
Repayment of long-term debt (13,965) (9,073)
Issuance of long-term debt 44,208 --
Interest paid (3,361) (5,958)
Dividends paid (85,709) (64,240)
--------------------------------------------------------------------- --------- ----------
Net Cash Flows From Financing Activities (92,271) (234,767)
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Effect of Exchange Rate Changes on Cash and Cash Equivalents 4,022 6,010
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Net (Decrease) in Cash and Cash Equivalents (24,103) (545,040)
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Cash and Cash Equivalents
- Beginning of period 686,033 1,131,091
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- End of period 661,930 586,051
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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, 2003 By: /s/ Allan Shaw
-------------------------
Name: Allan Shaw
Title: Chief Financial Officer