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2009 Annual Conference Call Transcript
January 26, 2010, 8:00 a.m. ET
Daniel L. Vasella - Chairman of the Board and Chief Executive Officer
Raymond Breu - Chief Financial Officer
Joseph Jimenez - Chief Executive Officer of Pharmaceuticals Division
Daniel L. Vasella
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So in the past year, we had record results and these record results were really driven by all divisions. The divisions gained market share all, and that was especially satisfactory and we will see later in if we look at the geographic spread and we had double-digit growth across the world. The portfolio is strong. A lot of new products are waiting and the pipeline is developing quite nicely. And with this business expansion we can also propose another increase in dividends by 5% to CHF 2.10 which will be the 13th in a row and really it represents a 12% annual growth of dividends, so, which I consider not bad at all.
And finally, we have announced this morning, a new leadership of the company with Joe Jimenez becoming CEO and with some what smaller executive committee. So quick look at the figures in local currencies growth achieved 11% and operating income currency corrected was 20% above last year.
And then obviously the first three quarters had a negative impact from the dollar. So the respective numbers in dollars are 7% and 11% and then we have the Alcon acquisition cost, the financing cost which then interviewing between the operating income and the net income. I won't go into details. Raymund will do that. So, 4% increase at in net 3 in EPS and if you take the core earnings, and the core income, core operating income, that numbers are 11%, 8% and 8%.
If you look at the sales and the operating income by division, we have sales growing by 12% in Pharma and OpInc by 18 in constant currencies, 11% in dollars. V&D, Vaccines and Diagnostics, very dynamic growth of 39% respectively 38% and a decent increase in operating income obviously heavily influenced by H1N1. And then Sandoz in local currencies up 5% and in constant currencies also you see the productivity improvement up 10% and then unfortunately a lot is eaten away by the dollar and a similar picture in consumer health and there I would just like to add that, we had a very good campaign on Prevacid 24HR, which brought in a lot of sales the cost even more than the sales.
So, I will come back very briefly to that. Here you see the growth in the various geographies as I said double-digit, so a very balanced across the globe and if we look at the strategy and the factors really which will influence the strategy. We have on one side, demand factors which remained quite constant and the aging of society is very important. The emerging markets are very important and on the other side we have the other equation of the balance, which is more demand creates more costs.
So, there are cost containment measures and that's also across the world and the real trick is how to navigate there and to provide real value to patient and customers so that they are willing to pay the price which is asked for the product and they see that they get better values from us than from somebody else.
If you look at the achievements of last year, we have stepped up innovation. We have had 25 approvals in Pharma in the major geographies, 30 overall in the group. We strengthened our portfolio mainly with the Alcon acquisition, which is intended now and then expand it in the high growth markets. Of course, China is the most important there for us and we will continue to strive in the future. We also invest very heavily in China, notably in innovation, in research and development.
The productivity has been improved and we continue to pay a lot of attention on the people side. An organization which is so heavily dependent on the degree of innovation and the performance of people, it's really acknowledge company does have to pay a lot attention to its people.
And finally, we also continued to pay contribution to society where we don't make a profit but really contribute. We had in the last several years more approvals in the U.S. than any other company. That continued in 2009 and if we have a quick look at the pipeline and these are products which are now in earlier development, clinical development with a positive proof of concept trial and we see that we have not just innovative structures, but we have very innovative targets and these are in cancer, in asthma, in epilepsy, and Uveitis.
So, you see smaller indications, larger indications, and in general, I would say the degree of innovation we have, also shows later that we see new applications in new efficacies in different diseases that has been the history of these highly innovative compounds and I am very confident of that this will be throughout in the future.