`
`20-F 1 a2128888z20-f.htm 20-F
`
`Use these links to rapidly review the document
`TABLE OF CONTENTS
`TABLE OF CONTENTS TO THE OPERATING AND FINANCIAL REVIEW AND PROSPECTS
`INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
`AVENTIS GROUP INDEX TO THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
`Item 19. Exhibits
`
`SECURITIES AND EXCHANGE COMMISSION
`WASHINGTON, D.C. 20549
`
`FORM 20-F
`
`
`
`
`
`
`
`
`
`
`REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
`OF THE SECURITIES EXCHANGE ACT OF 1934
`OR
`ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
`OF THE SECURITIES EXCHANGE ACT OF 1934
`For the fiscal year ended December 31, 2003
`OR
`TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
`OF THE SECURITIES EXCHANGE ACT OF 1934
`For the transition period from to
`
`Commission file number: 1-18378
`
`Aventis
`
`(Exact name of Registrant as specified in its charter)
`
`Not applicable
`(Translation of Registrant's name into English)
`
`
`
`
`67917 Strasbourg cedex 9
`France
`(Address of principal executive offices)
`
`Republic of France
`(Jurisdiction of incorporation or organization)
`
` Securities registered or to be registered pursuant to Section 12(b) of the Act:
`
`Title of each class:
`
`Name of each exchange on which registered
`
`American Depositary Shares, each representing one Ordinary Share nominal value € 3.82
`per share
`Ordinary Shares, nominal value € 3.82 per share*
`Guarantee of 81/8% Cumulative Preference Shares of Aventis Overseas Ltd
`
`
`
`
`
`
`
`
` Securities registered or to be registered pursuant to Section 12(g) of the Act:
`
`New York Stock Exchange
`New York Stock Exchange
`New York Stock Exchange
`
` American Depositary Shares, each representing one quarter of a Participating Share Series A par value € 70.89 per share.**
`
` Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
`https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`
`1/210
`
`
`
`8/1/2017 https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`
`(*)
`
`(**)
`
`Listed not for trading or quotation purposes, but only in connection with the registration of the American Depositary Shares pursuant to the requirements of the Securities
`and Exchange Commission.
`
`The American Depositary Shares representing Participating Shares Series A were removed from listing and registration on the New York Stock Exchange effective
`July 31, 1995.
`
` Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period
`covered by the annual report:
`
` Ordinary Shares, nominal value € 3.82 per Share: 802,292,807
`
` Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
`Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and
`(2) has been subject to such filing requirements for the past 90 days.
`
` Indicate by check mark which financial statement item the registrant has elected to follow.
`
`Item 17 Item 18
`
`Yes No
`
`
`PRESENTATION OF FINANCIAL AND OTHER INFORMATION
`
` Since January 1, 1999, we have published our consolidated financial statements in euros. For periods prior to January 1, 1999, our
`consolidated financial statements were originally prepared in French francs and subsequently translated into euro amounts at the fixed
`legal rate of € 1.00 = FF 6.55957. Our business combination partner Hoechst has also published its consolidated financial statements in
`euros since January 1, 1999. For periods prior to January 1, 1999, Hoechst's consolidated financial statements were originally prepared in
`German marks and subsequently translated into euro amounts at the fixed legal rate of € 1.00 = DM 1.95583. Solely for the convenience
`of the reader, this Annual Report contains translations of certain French franc, German mark and euro amounts into U.S. dollars at
`specified rates. We do not represent that the converted amounts actually represent such U.S. dollar amounts or could be converted into
`U.S. dollars at the rates indicated or at any other rate. You should also not construe such translations to mean that translated euro amounts
`relating to the respective financial statements of Aventis and Hoechst for periods prior to January 1, 1999 are directly comparable.
`
` Unless otherwise stated, the translations into dollars have been made at the rate of € 1.00 = $ 1.2597, the Noon Buying Rate in New
`York City for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York (the "Noon Buying Rate") on
`December 31, 2003. See "Exchange Rate Information" for information regarding the French franc/U.S. dollar exchange rate from
`January 1, 1998, to December 31, 1998, and the euro/U.S. dollar exchange rate since January 1, 1999.
`
` Unless otherwise indicated, the financial information relating to Aventis contained in this Annual Report has been prepared in
`accordance with accounting principles generally accepted in France (commonly known as French GAAP), which differs in certain
`significant respects from accounting principles generally accepted in the United States (commonly known as U.S. GAAP). See Note 34 to
`the Aventis Consolidated Financial Statements in this Annual Report for the years ended December 31, 2003, 2002 and 2001 included as
`part of Item 18 of this Annual Report for a description of the principal differences between French GAAP and U.S. GAAP as they relate to
`Aventis and its consolidated subsidiaries as well as a reconciliation to U.S. GAAP of net income and stockholders' equity.
`
` Unless the context requires otherwise (i) "Aventis" or "We" refers, for period prior to December 15, 1999, to Rhône-Poulenc and to
`Aventis and its consolidated subsidiaries for all periods beginning or subsequent to December 15, 1999, (ii) all references to Hoechst
`include Hoechst AG and its consolidated subsidiaries as of the relevant date, (iii) all references to "United States" or "U.S." are to the
`United States of America, references to "dollars" or "$" are to the currency of the United States. References to "France" are to the
`Republic of France and references to "French francs," "francs" or "FF" are to the currency of France prior to January 1, 1999. References
`to "euros" and "€" are to the currency of the 11 European Union member states (including France and Germany) participating in European
`Monetary Union.
`
` Social and environmental information included in the Management Board report to be presented to the 2004 Annual General
`Meeting, in accordance with French Commercial Law, are presented in the Aventis Sustainability Report for 2003, which we have
`included as Exhibit 99.1 to the present 2003 Aventis Annual Report on Form 20-F.
`
`https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`
`2/210
`
`
`
`8/1/2017 https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`
`CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
`
` Statements in this Annual Report regarding management's expectations, targets or intentions or to the future performance or
`circumstances of Aventis, including among other things, statements containing projections or estimates of revenues, income, earnings per
`share, capital expenditures, capital structure, or other financial items; plans and objectives relating to future operations, products, or
`services; future economic performance; or assumptions underlying or relating to any such statements, are forward-looking statements that
`are based on the current expectations and estimates of Aventis management, and are subject to risks and uncertainties. Actual results may
`differ materially depending on factors that may include, but are not limited to, any of the following:
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`failure to achieve sales goals due to competition or market acceptance of our products;
`
`successful introduction of generic competitors to any of our strategic brands;
`
`unexpected negative results from research and development or clinical trials of current product candidates;
`
`failure to obtain, or unexpected delays in obtaining, new product and therapeutic indication regulatory approvals;
`
`i
`
`unfavorable exchange rate movements, particularly between the U.S. dollar and the euro;
`
`delay in, or failure to achieve expected levels of net proceeds from, sales of assets;
`
`introduction of new or revised regulations or requirements pertaining to product approval, product safety,
`environmental protection or manufacturing processes;
`
`regulatory actions that are either unexpected or inopportunely timed;
`
`attempts by third parties to obtain ownership or control of Aventis without the support of Aventis management;
`
`patent protection that proves ineffective;
`
`unexpected litigation costs or liabilities; and
`
`other risks and uncertainties that are difficult to predict.
`
` See "Item 3. Key Information — Risk Factors" for further information regarding risks and uncertainties that could cause actual
`results to differ materially from these forward-looking statements.
`
`
`USE OF BRAND NAMES IN THIS REPORT
`
` Brand names appearing in italics throughout this Annual Report are trademarks of Aventis and/or its affiliates, with the exception of:
`
`—
`
`—
`
`trademarks used or that may be used under license by Aventis and /or its affiliates, such as Actonel, a trademark of
`the Group Procter & Gamble Pharmaceuticals, Alvesco, a trademark of the Group Altana Pharma AG, Campto, a
`trademark of the Group Kabushiki Kaisha Yakult Honsha, Copaxone, a trademark of the Group Teva
`Pharmaceutical Industries, DiaPep277, a trademark of Peptor Ltd, Exubera, a trademark of the Group Pfizer
`Products Inc., Genasense, a trademark of Genta Inc in the USA, Tavanic, a trademark of the Group Daiichi
`Pharmaceutical Co. Ltd., Mutagrip, a trademark of Institut Pasteur, Vasten, a trademark of the Group E.R.
`Squibb & Sons, Inc.
`
`trademarks sold by Aventis and/or its affiliates, such as Ansiolin, a trademark of the Group Almirall Prodesfarma
`S.p.A., Cardizem, a trademark of the Group Biovail only in the USA, Carafate, Sulcrate, Bentyl, Bentylol and
`Proctosedyl (only in the U.S. and Canada), and Delursan, trademarks of the Group Axcan Pharma Inc., Colchimax,
`a trademark of Laboratoire de l'Opocalcium in France, Ionamin, a trademark of the Group Medeva Pharmaceutical
`Manufacturers Inc. except in Canada and Spain, StarLink, a trademark of the Group Bayer AG, Suvenyl, a
`
`https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`
`3/210
`
`
`
`8/1/2017 https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`trademark of the Group Chugai Pharmaceutical Co.Ltd, Synercid, a trademark of King Pharmaceuticals.
`
`Arixtra, a trademark of the Group Sanofi-Synthélabo, Cipro in the U.S., a trademark of Bayer AG, Claritin, a
`trademark of the Group Schering Corporation, Ivomec, Eprinex, Frontline, trademarks of Merial and Hexavac, a
`trademark of Aventis Pasteur MSD.
`
`—
`
`ii
`
`
`TABLE OF CONTENTS
`
`Items(*)
`
`Item 3
`
`
`
`Item 4
`
`
`
`
`
`
`Item 5
`
`
`Item 6
`Item 7
`Item 8
`Item 9
`
`
`Item 10
`
`
`Item 11
`Item 15
`Item 16A
`Item 16B
`Item 16C
`Item 18
`Item 19
`
`
`
` Key Information
`
` Selected Financial Data
`
` Exchange Rate Information
`
` Risk Factors
`
`Information on the Company
`
` Profile and Strategy
`
` Products
`
` Research and Development
`
` Property, Plant and Equipment
`
` Markets
`
` Non-Core Business
` Operating and Financial Review and Prospects
`
` Results of Operations: 2003 compared to 2002
`
` Results of Operations: 2002 compared to 2001
` Directors, Senior Management and Employees
` Major Shareholders and Related-Party Transactions
`
`Financial Information
`
`The Offer and Listing
`
` Markets
`
` Trading Practices and Procedures
` Additional Information
`
` Share Capital and By-Laws
`
` Taxation
` Quantitative and Qualitative Disclosure about Market Risk
`
`Controls and Procedures
` Audit Committee Financial Expert
`
`Code of Ethics
` Accountants' Fees and Services
`
`Consolidated Financial Statements
`
`Exhibits
`
`(*)
`
`Items 1, 2, 12 and 17 are not required for this annual report on Form 20-F. Items 13 and 14 are not applicable to Aventis for the period covered by this report.
`
`iii
`
`iv
`
`
`PART I
`
`Item 1. Identity of Directors, Senior Management and Advisers
`
` Not Applicable.
`
`https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`
`4/210
`
`
`
`8/1/2017 https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`
`1 2
`
`Item 2. Offer Statistics and Expected Timetable
`
` Not Applicable.
`
`Item 3. Key Information
`
`Selected Financial Data
`
` The tables below set forth selected consolidated financial data for Aventis for each of the five years during the period ended
`December 31, 2003, prepared in accordance with generally accepted accounting principles in France. These financial data are derived
`from the Aventis Consolidated Financial Statements, which have been audited by PricewaterhouseCoopers, independent auditors. The
`selected consolidated financial data for 2001, 2002 and 2003 should be read in conjunction with the Aventis Consolidated Financial
`Statements and the related notes included elsewhere in this Annual Report. See "Item 18. Consolidated Financial Statements" for further
`information.
`
` The generally accepted accounting principles in France (known as French GAAP) as applied by Aventis differ in significant respects
`from generally accepted accounting principles in the United States (U.S. GAAP). For a discussion of the principal differences as they
`relate to Aventis, and a reconciliation of net income and total stockholders' equity for the three years ended December 31, 2003, 2002 and
`2001 to U.S. GAAP, see Note 34 to the Aventis Consolidated Financial Statements included in this Annual Report at Item 18.
`
`
`Aventis Selected Consolidated Financial Data
`
`
`
`
`
`
`
`For the year ended and as of December 31,
`
`2003(1)
`
`2003
`
`2002
`
`2001
`
`2000
`
`1999(2)
`
`€
`
`
`
`
`
`€
`
`
`
`€
`
`
`
`
`
`€
`
`€
`
`
`
`
`
`$
`
`
`
`
`(in millions, except for the number of ordinary shares,
`which is in thousands, and the per share data)
`
`
`
`
`
`
`
`
`Income statement data:
`Net sales
`Operating income (loss)
`Income (loss) before taxes and minority
`interests
`Provision for income taxes
`Minority interests
`Net income (loss) before preferred
`remuneration
`Preferred remuneration(3)
`Net income available for distribution to
`common shareholders or (loss)(4)
`Basic earnings (loss) per ordinary share
`Diluted earnings (loss) per ordinary share
`Dividend per ordinary share(5)
`Average number of ordinary shares
`outstanding
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`22,442
`4,623
`
`
`
`
`17,815
`3,670
`
`
`
`
`20,622
`2,830
`
`
`
`
`22,941
`3,639
`
`
`
`
`22,304
`617
`
`3,667
`(1,170)
`(37)
`
`(2,460)
`(66)
`
`(2,395)
`3.05
`3.04
`
`
`2,911
`(929)
`(29)
`
`1,953
`(52)
`
`1,901
`2.42
`2.41
`
`
`3,692
`(1,430)
`(86)
`
`2,176
`(85)
`
`2,091
`2.64
`2.61
`0.70
`
`2,886
`(1,111)
`(142)
`
`1,633
`(128)
`
`1,505
`1.91
`1.89
`0.58
`
`(25)
`(60)
`(85)
`
`(29)
`(118)
`
`(147)
`(0.19)
`(0.19)
`0.50
`
`
`
`12,598
`(544)
`
`(823)
`42
`(70)
`
`(851)
`(119)
`
`(970)
`(2.49)
`(2.49)
`0.45
`
`785,906
`
`785,906
`
`793,412
`
`787,554
`
`780,546
`
`390,148
`
`3
`
`https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`
`5/210
`
`
`
`8/1/2017 https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`
`
`
`
`
`
`
`
`
`For the year ended and as of December 31,
`
`2003(1)
`
`2003
`
`2002
`
`2001
`
`2000
`
`1999(2)
`
`€
`
`
`
`
`
`€
`
`€
`
`
`
`€
`
`
`
`
`
`
`(in millions, except for the number of ordinary shares,
`which is in thousands, and the per share data)
`
`
`
`
`
`€
`
`$
`
`
`
`
`780
`5,203
`35,621
`3,978
`6,753
`4,988
`
`210
`–
`13,144
`4,719
`
`
`
`
`619
`4,130
`28,277
`3,158
`5,361
`3,960
`
`167
`–
`10,434
`3,746
`
`
`
`
`(832)
`4,455
`31,073
`1,787
`6,987
`3,452
`
`159
`89
`11,335
`3,899
`
`
`
`
`(1,154)
`5,740
`39,234
`4,652
`7,225
`9,195
`
`913
`200
`12,021
`3,917
`
`
`
`
`(1,099)
`7,498
`42,183
`8,216
`6,994
`13,133
`
`1,029
`272
`10,561
`3,880
`
`
`
`
`1,053
`3,683
`
`
`
`
`836
`2,924
`
`
`
`
`1,000
`3,420
`
`
`
`
`1,245
`3,481
`
`
`
`
`1,570
`3,479
`
`
`(2,913)
`7,496
`41,578
`6,437
`5,944
`12,270
`
`1,460
`325
`10,371
`3,869
`
`
`746
`1,475
`
`
`
`
`
`
`
`
`
`Balance sheet data:
`Working capital(6)
`Property, plant and equipment, net
`Total assets
`Long-term debt(7)
`Other long-term liabilities
`Net debt(8)
`Minority interests in net assets of consolidated
`subsidiaries
`Amortizable preferred securities
`Stockholders' equity
`Capital stock(9)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Other operating data:
`Capital expenditures
`Research and development expenses
`
`
`
`
`
`Dollar amounts provided for convenience only and are translated at the Noon Buying Rate in effect on December 31, 2003 (€ 1.00 = $ 1.2597).
`The Aventis Consolidated Financial Statements consolidate Hoechst from December 15, 1999.
`Preferred remuneration consists of payments with respect to (a) Preferred Shares Series A, (b) Amortizable Preferred Securities, (c) Participating Shares Series A and
`(d) Capital Equity Notes.
`Common shares consist of Ordinary Shares "A."
`The dividend for 2003 will be proposed at the Annual General Meeting in April 2004 and is subject to approval by shareholders.
`Working capital is defined as total current assets minus total current liabilities.
`Long-term debt includes the debt relating to capitalized leases but does not include the current portion of long-term debt.
`Net debt is defined as bank overdrafts, current portion of long-term debt, short-term and long-term borrowings minus cash, short-term deposits and marketable securities.
`Consisting of ordinary shares, capital equity notes, preference shares and participating shares. See Note 10 to the Aventis Consolidated Financial Statements included in
`this Annual Report.
`
`(1)
`(2)
`(3)
`(4)
`(5)
`(6)
`(7)
`(8)
`(9)
`
`
`
`
`
`
`
`
`
`
`
`
`
`For the year ended and as of December 31,
`
`2003(1)
`
`2003
`
`2002
`
`2001
`
`2000
`
`1999(2)
`
`€
`
`
`
`
`
`€
`
`€
`
`
`
`€
`
`
`
`
`
`
`(in millions, except for the number of ordinary shares,
`which is in thousands, and the per share data)
`
`
`
`
`
`€
`
`$
`
`
`
`
`
`
`21,214
`317
`5,063
`(1,117)
`(36)
`3,016
`
`2,610
`
`(55)
`2,555
`
`
`
`
`
`
`16,841
`252
`4,020
`(887)
`(29)
`2,394
`
`2,072
`
`(44)
`2,028
`
`
`
`
`
`
`17,649
`161
`3,797
`(1,239)
`(43)
`1,788
`
`1,950
`
`(57)
`1,893
`
`
`
`
`
`
`
`
`16,609
`151
`2,742
`(772)
`(49)
`983
`
`816
`
`(78)
`738
`
`
`
`
`
`
`
`
`16,121
`
`172
`118
`(18)
`78
`
`(623)
`
`(85)
`(708)
`
`
`
`
`12,415
`
`(2,990)
`(728)
`(19)
`(3,509)
`
`(3,026)
`
`(4)
`(3,030)
`
`
`
`
`
`
`
`
`
`
`
`
`
`U.S. GAAP data(10)
`Income statement data:
`Net sales
`Co-promotion income
`Operating income (loss)
`Income taxes
`Minority interests
`Net income from continuing operations
`Net income (loss) before remuneration of preferred
`securities classified in stockholders' equity
`Remuneration of preferred securities classified in
`stockholders' equity(4)
`Net income (loss) – common shareholders
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`
`6/210
`
`
`
`8/1/2017 https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`Basic earnings (loss) – continuing operations –
`
`3.77
`2.99
`2.18
`1.15
`(0.01)
`(7.86)
`common shareholder
`Diluted earnings (loss) – continuing operations –
`common shareholder
`Basic earnings (loss) per share – common stock
`Diluted earnings (loss) per share – common stock
`
`
`
`
`
`3.75
`3.25
`3.24
`
`2.98
`2.58
`2.57
`
`2.16
`2.39
`2.37
`
`1.13
`0.94
`0.93
`
`(0.01)
`(0.91)
`(0.91)
`
`(7.86)
`(6.78)
`(6.78)
`
`4
`
`For the year ended and as of December 31,
`
`2003
`
`2002
`
`2001
`
`2000
`
`1999(2)
`
`
`
`
`
`€
`
`€
`
`
`
`€
`
`
`
`
`
`€
`
`
`
`
`(in millions, except for the number of ordinary shares,
`which is in thousands, and the per share data)
`
`€
`
`2003(1)
`
`$
`
`
`
`
`
`
`
`
`
`
`
`
`
`Balance sheet data:
`Working capital(6)
`Property, plant and equipment, net
`Total assets
`Long-term debt(7)
`Other long-term liabilities
`Minority interests in net assets of consolidated
`subsidiaries
`Amortizable preferred securities
`Stockholders' equity
`Capital stock(9)
`Number of ordinary shares outstanding
`
`U.S. GAAP Other operating data:
`Capital expenditures
`Research and development expenses
`Dividend per ordinary share(5)
`Net debt(8)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`1,019
`5,420
`42,773
`3,978
`8,550
`
`223
`
`18,497
`4,719
`802,293
`
`
`1,053
`3,607
`—
`4,914
`
`
`
`
`
`
`809
`4,303
`33,955
`3,158
`6,787
`
`177
`—
`14,684
`3,746
`802,293
`
`
`836
`2,863
`—
`3,901
`
`
`
`
`
`
`141
`4,378
`37,083
`1,787
`8,483
`
`155
`89
`15,784
`3,899
`799,474
`
`
`1,000
`3,143
`0.70
`3,468
`
`
`
`
`
`
`(784)
`4,429
`48,509
`4,579
`8,642
`
`287
`200
`17,582
`3,917
`795,622
`
`
`1,245
`2,896
`0.58
`7,317
`
`
`
`
`
`
`3,818
`4,617
`52,597
`6,653
`8,157
`
`968
`272
`17,258
`3,880
`785,879
`
`
`1,570
`2,936
`0.50
`8,174
`
`3,094
`8,273
`52,229
`6,437
`9,337
`
`1,485
`325
`17,603
`3,869
`779,816
`
`877
`4,944
`0.45
`11,484
`
`(1)
`(2)
`
`(3)
`(4)
`(5)
`(6)
`(7)
`(8)
`(9)
`(10)
`
`Dollar amounts provided for convenience only and are translated at the Noon Buying Rate in effect on December 31, 2002 (€ 1.00 = $ 1.2597).
`For French GAAP purposes, the Aventis consolidated Financial Statements consolidate Hoechst from December 15, 1999. For French GAAP purposes, the Aventis
`Consolidated Financial Statements for 1998 do not consolidate any contributions from Hoechst. For U.S. GAAP purposes, the formation of Aventis was accounted for as
`a reverse acquisition as of December 15, 1999.
`Remuneration of preferred securities classified in Stockholders' equity consist of payments with respect to (a) Preferred Shares Series A, (b) Participating Shares Series A
`and (c) Capital Equity Notes.
`Common shares consist of Ordinary Shares "A".
`The dividend for 2003 will be proposed at the Annual General Meeting in April 2004 and is subject to approval by shareholders.
`Working capital is defined as total current assets minus total current liabilities.
`Long-term debt includes the debt relating to capitalized leases but does not include the current portion of long-term debt.
`Net debt is defined as bank overdrafts, current portion of long-term debt, short-term and long-term borrowings minus cash, short-term deposits and marketable securities.
`Consisting of ordinary shares, capital equity notes, preference shares and participating shares. See Note 10 to the Aventis Consolidated Financial Statements included in
`this Annual Report.
`Discontinued operations of 2003 have been restated in 2002 and 2001; discontinued operations of 2002 and 2001 have been restated in 2001 and 2000; such information
`is not reasonably available for prior years. Discontinued operations occurring in 1999 were disclosed in 1999.
`
`5
`
`Exchange Rate Information
`
` For your convenience, this Annual Report contains translations of certain euro amounts into U.S. dollars. Unless otherwise indicated,
`dollar amounts have been translated from euros at the rate of € 1.00 = $ 1.2597, the Noon Buying Rate for the euro on December 31, 2003.
`The "Noon Buying Rate" is the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs
`purposes by the Federal Reserve Bank of New York. This does not mean that we actually converted these amounts into U.S. dollars at that
`rate, and you should not assume that they could have been converted at that or any other rate.
`https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`
`7/210
`
`
`
`8/1/2017 https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
` Fluctuations in the exchange rate between the euro and the U.S. dollar will affect the U.S. dollar price of our American Depositary
`Shares (ADSs) on the New York Stock Exchange and the U.S. dollar value of any dividends we may declare.
`
` The following table shows the euro/U.S. dollar exchange rate for 1999 through February 2004 based on the Noon Buying Rate
`expressed in euros per U.S. dollar.
`
`
`Selected Exchange Rate Information
`
`
`Month
`Euro/U.S. dollar(2)
`February 2004
`January 2004
`December 2003
`November 2003
`October 2003
`September 2003
`
`Year
`Euro/U.S. dollar(2)
`2003
`2002
`2001
`2000
`1999
`
`Period-end
`rate
`
`Average
`rate(1)
`
`High
`
`Low
`
`
`
`
`
`
`
`
`
`
`
`€0.80
`0.80
`0.79
`0.83
`0.86
`0.86
`
`
`
`€0.79
`0.95
`1.12
`1.07
`0.99
`
`
`
`
`
`
`
`
`
`
`
`€0.79
`0.79
`0.81
`0.85
`0.85
`0.89
`
`
`
`€0.88
`1.05
`1.12
`1.09
`0.94
`
`
`
`
`
`
`
`
`
`
`
`€0.80
`0.81
`0.83
`0.88
`0.86
`0.92
`
`
`
`€0.97
`1.16
`1.19
`1.21
`1.00
`
`€0.78
`0.78
`0.79
`0.83
`0.85
`0.86
`
`€0.79
`0.95
`1.05
`0.97
`0.85
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`(1)
`(2)
`
`The average rate of the Noon Buying rate for euros on the last business day of each month during the relevant period.
`Originally published as U.S. dollar/euro.
`
`6
`
`Risk Factors
`
` Important factors that could cause actual results to differ materially from our expectations are disclosed in this Annual Report,
`including without limitation those described under "Cautionary Statement Regarding Forward-Looking Statements" and the following risk
`factors. In addition to the risks listed below, we may be subject to other material risks that are not currently known to us or that we deem
`immaterial at this time.
`
`Risks Related to our Business
`
`If research and development does not yield new products that achieve commercial success, we will not realize our business growth
`expectations.
`
` Like other major pharmaceutical companies, we devote substantial resources to research and development with the goal of
`maintaining a continuous flow of innovative products through our research and development pipeline to marketing approval. For a number
`of reasons, including the lengthy product development process, technological challenges, and intense competition, we cannot assure you
`that any of our products currently under development, or for which we may begin the development process, will be marketed and achieve
`substantial commercial success. If we are not able to maintain a continuous flow of successful new products to cover our substantial
`research costs and replace sales that are lost as older products approach the end of their commercial life cycles or are displaced by
`competing products or therapies, we will not be able to maintain our current levels of sales or operating results.
`
`Patent protection may prove ineffective. Loss of effective patent protection on one or more products could result in lost sales to
`competing products and negatively affect our sales and operating results.
`
`https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
`
`8/210
`
`
`
`8/1/2017 https://www.sec.gov/Archives/edgar/data/807198/000104746904006848/a2128888z20-f.htm#eo1018_aventis_group_index_to_the_not__ave03011
` We own, have applied for, or are licensed under, numerous patents relating to our products. During the period in which a brand-name
`pharmaceutical product's active ingredient is subject to patent protection and any applicable period of regulatory exclusivity, the product
`may be subject to competition only from alternative therapies and alternative products using different active ingredients. Following
`expiration of patent protection for the active ingredient, however, a brand-name product is likely to face additional competition through
`the entry into the market of "generic" products containing the same active ingredient. In the United States, if such a product demonstrates
`"bioequivalence," or the ability to maintain blood levels of active ingredient equivalent to the brand-name product, it may be approved for
`marketing without the costly and time-consuming development efforts and testing required for the original brand-name product. The entry
`of a generic product into the market typically is followed by a substantial decline in the brand-name product's market share and sales
`revenues. The extent to which generic competition can be expected to affect sales and margins of the original brand-name product in a
`given market depends on such factors as whether demand for the therapy will support multiple producers, the time and expense involved
`in obtaining marketing approval for the generic, the relative ease or difficulty of manufacturing the product, and the ability of the brand-
`name product's manufacturer to develop new or different patented formulations with substantially improved characteristics, such as ease of
`administration.
`
` In the pharmaceutical industry, patent expirations may affect even relatively recently approved drugs, the active ingredients of which
`may have been discovered and patented long before the discovery and approval of their use for specific therapeutic indications. However,
`in addition to patents covering the active ingredient, our pharmaceutical products may be protected by other patents, including those
`covering different formulations used in treatment, specific methods of manufacture, methods of administration, and specific indications of
`use. Until their expiration, such patents may provide varying degrees of protection for a drug beyond the expiration of patents covering
`only its active ingredients, for example if an active ingredient or finished product is particularly difficult to manufacture or if more
`appealing formulations or methods of administration provide advantages over generic competitors. However, there can be no assurance
`that competitors will not be able to "design around" such patents, develop alternative methods of manufacture, or create non-infringing
`formulations that are at least as appealing.
`
` Sales and profitability of our patented products also may be adversely affected if any claims of a relevant patent are determined to be
`invalid, unassertable, or unenforceable, or if competing products are introduced that are therapeutically similar but that do not infringe our
`products' patents. If any such situation affected one of our best-selling products, it could have a substantial negative effect on our operating
`results, financial position and cash flows. Patent litigation is subject to substantial uncertainty, and there is no assurance that any of the
`patents relating to our products, if challenged, will be found valid and enforceable in any or all respects. In addition, when we sue to
`enforce our patents, the defendants may assert counterclaims under antitrust or other laws, which could result in judgments against us for
`damages,
`
`7
`
`including treble damages, that could have a material adverse effect on our operating results, financial position, and cash flows.
`
` The extent of patent protection also varies from country to country. In some countries, patent protection is significantly weaker than
`in the United States or the European Union. In particular, some countries may facilitate competition within their markets by requiring us to
`grant compulsory licenses to others to manufacture or distribute generic versions of our patented products in their countries, by permitting
`others to manufacture or distribute generic versions of our products in violation of our patent rights, or by having ineffective patent
`enforcement mechanisms.
`
` In the United States, the effectiveness of patent protection for prescription drugs (other than biologicals) is significantly influenced by
`the Hatch-Waxman Act of 1984, which provides that a newly approved drug or indication will receive a statutory period of marketing
`exclusivity (five year