Bill Weldon, who has been CEO at Johnson & Johnson for the past ten years, will relinquish his title as chief executive on April 26 to Alex Gorsky, who began his J&J career nearly 25 years ago. The company’s recently published 2011 Annual Report included Mr. Weldon’s final shareholder letter as CEO (link); here are some of the highlights:
Headwinds remain at JNJ, but are being addressed – “As 2011 came to a close, we moved through a turning point. The headwinds from patent expirations, tough portfolio choices, litigation matters and OTC product quality issues had been, or were being, addressed.”
2011 Results – “Johnson & Johnson returned to delivering operational sales growth in 2011. We grew adjusted earnings for the 28th consecutive year. Our worldwide sales were $65.0 billion, an increase of 5.6 percent… Approximately 70 percent of our sales were from products with No. 1 or No. 2 global market share positions. Approximately 25% of our sales were from products introduced in the past five years… We generated significant free cash flow of approximately $11.4 billion, maintained our AAA credit rating and increased the dividend to our shareholders for the 49th consecutive year.
Committed to research & development – “Our continued investments in research and development (R&D), equaling nearly $37 billion over the past five years, yielded nine major approvals for new pharmaceutical products in the United States—including Stelara and Simponi in immunology; Prezista and Intelence in HIV; Zytiga in oncology; and Xarelto in cardiovascular disease. The emphasis we place on R&D has also led to exciting innovations in our Medical Devices and Diagnostics (MD&D) and Consumer platforms, such as contact lenses, electrophysiology, advanced energy, biosurgicals, oral care and skin care.”
Investing to meet future demand – “Populations in the developed world are aging rapidly, and we consume more health care as we grow older. Global expansion and growth, though slower than a few years ago, also lead to growing demand for health care, especially in emerging markets. Our investments continue to be aligned with these market opportunities to address unmet medical needs. Cancers, mental health disorders, diabetes, heart disease, stroke, rheumatoid arthritis and HIV are all among the most significant diseases—and they are markets where today we either have leadership or are increasing investments to gain leadership.”
The future at J&J – “Alex is an experienced and disciplined leader who will take the reins of our company during a turbulent time for health care but a very promising time for Johnson & Johnson. I can assure you, our shareholders, that Johnson & Johnson will continue to shape and lead the future of health care.”
Headwinds remain at JNJ, but are being addressed – “As 2011 came to a close, we moved through a turning point. The headwinds from patent expirations, tough portfolio choices, litigation matters and OTC product quality issues had been, or were being, addressed.”
2011 Results – “Johnson & Johnson returned to delivering operational sales growth in 2011. We grew adjusted earnings for the 28th consecutive year. Our worldwide sales were $65.0 billion, an increase of 5.6 percent… Approximately 70 percent of our sales were from products with No. 1 or No. 2 global market share positions. Approximately 25% of our sales were from products introduced in the past five years… We generated significant free cash flow of approximately $11.4 billion, maintained our AAA credit rating and increased the dividend to our shareholders for the 49th consecutive year.
Committed to research & development – “Our continued investments in research and development (R&D), equaling nearly $37 billion over the past five years, yielded nine major approvals for new pharmaceutical products in the United States—including Stelara and Simponi in immunology; Prezista and Intelence in HIV; Zytiga in oncology; and Xarelto in cardiovascular disease. The emphasis we place on R&D has also led to exciting innovations in our Medical Devices and Diagnostics (MD&D) and Consumer platforms, such as contact lenses, electrophysiology, advanced energy, biosurgicals, oral care and skin care.”
Investing to meet future demand – “Populations in the developed world are aging rapidly, and we consume more health care as we grow older. Global expansion and growth, though slower than a few years ago, also lead to growing demand for health care, especially in emerging markets. Our investments continue to be aligned with these market opportunities to address unmet medical needs. Cancers, mental health disorders, diabetes, heart disease, stroke, rheumatoid arthritis and HIV are all among the most significant diseases—and they are markets where today we either have leadership or are increasing investments to gain leadership.”
The future at J&J – “Alex is an experienced and disciplined leader who will take the reins of our company during a turbulent time for health care but a very promising time for Johnson & Johnson. I can assure you, our shareholders, that Johnson & Johnson will continue to shape and lead the future of health care.”
