Richard Lapthorne
Chairman

Amersham delivered a solid financial performance in 2002, with good sales growth and double-digit growth in earnings per share. Turnover reached £1,618 million, up seven per cent over 2001 at constant exchange rates. Earnings per share before exceptional items and goodwill amortisation were 29.9 pence, a growth of 15 per cent at constant exchange rates. The Board is recommending a final dividend of 5.15 pence per share, giving a full year dividend of 7.8 pence per share, a growth of 10 per cent.

In a year of challenging economic and market conditions, the breadth and balance of our global businesses continued to be a strong asset. In Amersham Biosciences, our protein separations business area grew sales by 15 per cent, and we achieved good sales of reagents in all areas of the life science market. This helped offset a slowdown in instrument sales in discovery systems, due primarily to reductions in capital spending in the US market. Similarly, in Amersham Health our portfolio of patented medical diagnostic products grew sales by 22 per cent, more than offsetting lower bulk sales into Japan. Overall, sales in North America, our largest market, were up by eight per cent to £799 million, sales in Europe rose eight per cent to £428 million, and sales in Japan were up by one per cent at £264 million.

In March, we achieved a key strategic objective. Completing the merger process which began in 1997, we purchased Pharmacia Corp’s 45 per cent stake in Amersham Biosciences to take full ownership of our life sciences business. The purchase was partially financed through the issue of 57.5 million new shares, raising £397 million towards the purchase price of £704 million, with the remainder being drawn from existing bank facilities and cash reserves. Having full ownership of Amersham Biosciences and Amersham Health opens new and exciting opportunities, particularly in research and development, for incorporating genetic knowledge into diagnostics – taking us a big step further towards our long-term vision of enabling personalised medicine.

2002 also saw heightened awareness of corporate governance issues for companies following revelations of corporate mismanagement and accounting fraud, primarily in the US. This has served to focus attention on the role of independent Non-Executive Directors in protecting the interests of shareholders. It has also resulted in new legislation (Sarbanes-Oxley Act) in the US, and a series of recommendations (the Higgs Review) which may be adopted during 2003 in the UK. Amersham’s Board is committed to high standards of corporate governance and we believe our current practices demonstrate this. We have always believed that using the Board to manage the company, exposing it to issues and a wider cross section of our managers provides an indispensable framework of business understanding, without which our corporate governance risks being a theoretical and unsubstantial activity. In this Annual Report, we have supplemented our disclosure and control procedures as required by the US legislation; and we shall review the proposed UK recommendations to ensure that our company continues to follow best practices.

We were extremely pleased to welcome a new Non-Executive Director to the Board this year. Professor Mathias Uhlén, Professor of Biotechnology at the Royal Institute of Technology in Stockholm, Sweden and an internationally recognised expert in proteomics, is a strong addition. Andrew Carr, President of Amersham Biosciences, and Peter Loescher, who has recently joined the company as President of Amersham Health, are new Executive Directors on the Board. We also wish to thank Dr John Padfield for his valuable contributions to the company. John retired from the Board and as the Chief Executive of Amersham Health in December, having delivered strong sales growth in Amersham Health during his three years with our company. John is now pursuing a portfolio of other opportunities and we wish him every success in the next stage of his career.

I shall retire from the Amersham Board at the Annual General Meeting in May 2003, having served as a Non-Executive Director for 14 years including four years as Chairman. Amersham has undergone an amazing transformation during my tenure, evolving from a small spin-off of the UK Atomic Energy Authority into a global leader in medical diagnostics and life sciences, achieved through a consistent application of strategy and two transformational mergers in 1997 with Nycomed and Pharmacia Biotech. We are now a driving force in medical innovation. Being a Director of this company, and playing a role in its development, has been a source of intense pleasure and pride.

On behalf of the Board, I want to express my sincere admiration and appreciation to all Amersham employees. Their dedication and talents have built a great company. I now pass the Chairman’s baton to Donald Brydon, a Non-Executive Director since 1997 and currently Chairman of the Audit Committee. Donald has had an illustrious career in investment management – 32 years and counting! – and he is eminently qualified to guide Amersham on the next stage of its development. My very best wishes to Donald, the Board and management, and to a great team of employees.

Richard Lapthorne Chairman