Gsk Plc · LSE:GSK
Gsk — Merger or Acquisition (March 2018)
28 slides from Gsk's merger presentation, March 2018
Slide 1: Accelerating our strategy: GSK to acquire full ownership of Consumer Healthcare Business
Accelerating our strategy: GSK to acquire full ownership of Consumer Healthcare Business Buyout of Novartis’ stake Strategic review of Horlicks and other Consumer Healthcare Nutrition products
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements This presentation may contain forward-looking statements. Forward-looking statements give the Group’s current expectations or forecasts of future events. An investor can identify these statements by the fact that they do not relate strictly t
Slide 3: Agenda
Agenda Emma Walmsley, Strategic overview Chief Executive Officer Simon Dingemans, Financial highlights Chief Financial Officer Brian McNamara, Winning in Consumer Healthcare CEO, Consumer Healthcare Emma Walmsley, Summary & Q&A Chief Executive Officer 3
Slide 4: Emma Walmsley, CEO: Strategic overview
Emma Walmsley, CEO Strategic overview
Slide 5: Balanced business to deliver growth and returns to shareholders
Balanced business to deliver growth and returns to shareholders Common goal to improve health, from prevention to treatment Pharmaceuticals Vaccines Consumer Healthcare Therapeutic and category leadership Leading positions in Broadest portfolio Category leadership HIV and Respiratory with leading po
Slide 6: Advancing our priorities
Advancing our priorities Key priorities for capital Invest 1. Pharma pipeline including BD Innovation in the 2. Consumer put business 3. Vaccines capacity Improved 80p per share expected for 2018 Performance cash Shareholder Focus on rebuilding free cash flow cover over time returns Target 1.25x to
Slide 7: Two important milestones for Consumer Healthcare
Two important milestones for Consumer Healthcare Shareholders capture full value of world-leading Consumer Healthcare business Buyout of Novartis’ stake Full ownership of Consumer Healthcare business Benefits adjusted earnings and cash flows helping accelerate performance Strategic review Horlicks a
Slide 8: Simon Dingemans, CFO: Financial Highlights
Simon Dingemans, CFO Financial Highlights
Slide 9: Financial Highlights
Financial Highlights Consideration – $13 billion (£9.2 billion1) Returns on JV2 – +10% IRR – CFROI targets met – Expected to be accretive to adjusted earnings in 2018 and thereafter Financial – Expected to strengthen cashflow generation effects – Supportive of target credit profile Consumer – Contin
Slide 10: Timing and considerations
Timing and considerations Novartis buy-out Review of Horlicks & Nutrition products • Shareholder approval required • Review to conclude around end of 2018 • Vote anticipated in 1H 2018 10
Slide 11: Brian McNamara: Winning in Consumer Healthcare
Brian McNamara CEO Consumer Healthcare Winning in Consumer Healthcare
Slide 12: Global leader in Consumer Healthcare
Global leader in Consumer Healthcare 1 1 Competitive geographic £7.8 billion net sales footprint Proven track record of Attractive returns delivery Strong and increasing Strong portfolio capabilities 1. 12 month net sales year ending 31 December 2017. 12
Slide 13: Industry dynamics
Industry dynamics Positive long term drivers Increasing health awareness and self care Ageing population 1 77% of consumers want to take 2 more control over decisions 1.4 billion aged 60+ by 2030, about their health an increase of 0.5 billion vs 2015 Emerging middle class Innovation 3 Almost 2.4 bil
Slide 14: Industry dynamics
Industry dynamics Sources of short-term variability Timing and strength of allergy and Seasonal cough/cold season Switches Growth followed by private label entry Economic variability (e.g. Brazil, Saudi Arabia) Emerging Government regulatory changes market dynamics (e.g. Indian GST and demonetisatio
Slide 15: Leadership in key categories and segments
Leadership in key categories and segments 4 OTC: £99 billion market 1 Oral Health: £22 billion market Digestive Pain Relief Respiratory Sensitivity Gum Health Denture Care Health #1 in global #1 in global #3 in global #1 in global #1 in gum health 3 #1 in global 1 1 pain market respiratory market di
Slide 16: Our Consumer Healthcare priorities
Our Consumer Healthcare priorities Our purpose: to help people do more, feel better, live longer Our strategy: meet the everyday healthcare needs of consumers by building consumer preferred and expert recommended brands, differentiated by science and insight-driven innovation Our priorities: Innovat
Slide 17: Building a competitive advantage through consumer-led, science-based innovation
Building a competitive advantage through consumer-led, science-based innovation Integrated category and Performance Innovation R&D innovation hubs Scientific and technical excellence Novel packaging, sensorials and claims Emerging markets and digital innovation External innovation and partnerships 1
Slide 18: This focus is driving a pipeline transformation
This focus is driving a pipeline transformation Key launches in past 12 months: Major focus of spend and capability on Power and Core brands Halved the number of projects whilst increasing overall pipeline value (vs. ’15) Flonase Sensimist parodontax US launch Voltaren No Mess Applicator “Gentle mis
Slide 19: A winning strategy for growth
A winning strategy for growth Sustained above market growth and strong operating margin progression Performance Building consumer preferred and expert recommended brands Winning with shoppers, customers and experts Seizing the digital opportunity Drive gross margin improvement, operational efficienc
Slide 20: Building consumer preferred and expert recommended brands: Sensodyne
Building consumer preferred and expert recommended brands Sensodyne: > £1 billion net sales and over ten years of double digit growth Sensodyne vs Toothpaste market Sensodyne Toothpaste Market ex Sensodyne Sales indexed to 2007 1 +11% CAGR +4% CAGR 2004 2007 2008 2009 2010 2011 2012 2013 2014 2015 2
Slide 21: Building consumer preferred and expert recommended brands: Voltaren
Building consumer preferred and expert recommended brands Voltaren: creating the world’s leading topical analgesic, >£600 million net sales Voltaren vs Pain market Voltaren Pain Market ex. Voltaren Sales indexed to 2007 1 +11% CAGR +4% CAGR 1999 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 22: Seizing the digital opportunity
Seizing the digital opportunity 1 When consumers go Digital is half of all online, they consider 2 media consumption 40% more brands 3 Almost half of offline sales are influenced by 4.6%4 total FMCG sales via e-commerce online information (~2% for OTC) 1. Global Web Index 2. McKinsey 3.Forrester Res
Slide 23: Investing in digital capability to win
Investing in digital capability to win Chief Digital Officer Chief Insights & Analytics Officer Head of Digital Leadership Created Digital Advisory Innovation Hub Board Capability Launched new marketing capability program Tech stack deal: owning our data and providing deeper Data Data driven precisi
Slide 24: Drive gross margin improvement, operational efficiencies and cash discipline
Drive gross margin improvement, operational efficiencies and cash discipline Expected 20%+ operating margin by 2020 at 2015 CER, expect operating margin to approach 20%1 mid-20’s by 2022 at 2017 CER Approaching Mid 20% 2 By 2022 17.7% Power brand mix 15.5% Supply chain A&P efficiencies Cost discipli
Slide 25: Fundamentals in place to lead Consumer Healthcare
Fundamentals in place to lead Consumer Healthcare Sustained above market growth and strong operating margin progression Strong and Category leadership increasing capability Seizing digital Strong pipeline opportunities Clear margin Proven track record progression of delivery roadmap 25
Slide 26: Emma Walmsley, CEO: Summary
do more feel better live longer Emma Walmsley, CEO Summary
Slide 27: Accelerating our strategy
Accelerating our strategy Shareholders capture full value of world-leading Consumer Healthcare business Innovation Benefits adjusted earnings and cash flows helping accelerate Performance performance Removes uncertainty and supports capital planning for Group’s other Trust priorities
Slide 28: Q&A
do more feel better live longer Q&A