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3
ABBOTT 2013 ANNUAL REPORT
LETTER TO OUR SHAREHOLDERS
This year we will open new manufacturing plants in China
and India to be closer to our growing customer base.
And we’ve met this evolution of our profile with a
commensurate reshaping of our structure and operations.
We’re continuing major initiatives begun in 2013 to
strengthen and streamline our international operations,
with regional marketing organizations deepening our
localization in key areas such as India, where we are
the largest pharmaceutical company serving the world’s
second-largest population.
ALIGNED
Abbott is in the right businesses and the right markets —
with the right products at the right time. We are very
well aligned with favorable global trends — scientific and
medical, demographic and economic — allowing us to help
more people around the world every year.
With a large and increasing percentage of our business
in emerging markets, we’re positioned to grow as both
these countries’ populations and their buying power
expand. This year, emerging economies are expected to
grow almost six percent, compared with just over two
percent for developed countries. And as nations move up
the income curve, one of their first priorities is improving
their people’s access to healthcare. As a result, developing
economies commit in excess of one-third more of their
incremental income growth to healthcare spending than
do people in high-income countries, and more than 50
percent more than those in low-income countries — yet
their healthcare spending remains only a small percentage
of gross domestic product relative to developed countries,
providing great long-term growth opportunity.
As an example of how economic growth can drive
healthcare investment, pharmaceutical spending in the
fastest-growing emerging markets is expected to nearly
double — the largest factor in total global pharmaceutical
market growth. We expect emerging markets to represent
approximately 75 percent of Abbott’s pharmaceutical
business within the next several years.
And the world’s population is not only growing, but aging.
Today, approximately 23 percent of the world’s population
is 50 or older; according to United Nations projections,
that percentage will grow to 40 percent by 2050. Abbott’s
leadership in treating conditions associated with aging —
such as cataracts, the world’s most-performed surgery, in
which we’re the second largest provider — promises strong
growth as need for these treatments continues to expand.
This trend oers similar opportunity to our adult nutrition
franchise, today a $3 billion business worldwide.
LEADING
These strengths and others make today’s Abbott a leader —
in its major businesses, in product and geographic
markets around the world, and in a broad range of
important business practices.
CONSISTENT DIVIDENDS
(dollars per share paid)
57%
3-YEAR TOTAL SHAREHOLDER RETURN
(year ended 12/31/13)
54.9%
56.8%
82.1% Total return
significantly
outperformed the
Dow Jones Industrial
Average, as well as the
Standard & Poor’s 500
index over the past
three years.
Abbott
S&P 500
DJIA
increase announced for
dividends to be paid in 2014.