Gsk Plc · LSE:GSK
Gsk — Q2 2016 Earnings Presentation
16 slides from Gsk's earnings presentation, Jul 27, 2016
Slide 1: Q2 2016 results
Q2 2016 results 27 July 2016
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: GSK strategy is on track
GSK strategy is on track 3 growth New products* show Q2 new product highlights: YoY growth businesses robust growth Rx: 8 new products*, £906m >100% inc. Tivicay and Triumeq £1,050m CH £821m £682m £591m Vx: Meningitis vaccines £446m £144m 88% Rx £269m Bexsero and Menveo Vx Q1 Q2 Q3 Q4 Q1 Q2 2015 201
Slide 4: Sustained delivery of innovation
Sustained delivery of innovation H1 progress includes Expected H2 milestones include Respiratory HIV Immuno- Oncology Rare Respiratory HIV Immuno- Vaccines • Salford Lung • Closed BMS inflammation • First in class diseases • Closed triple filing Start of Ph III for: inflammation • Shingrix filing US
Slide 5: Breo
Breo US ICS/LABA market share Breo ICS/LABA US market growth 18% of ~5% in Q2 Breo NBRx 16.5% 16% 14% Breo TRx volume now >51k weekly, supported by: 12% Breo TRx 10.2% 10% • Asthma indication launched Breo NRx 10.1% mid 2015 8% 6% • Improved formulary coverage: Commercial 83% and Medicare 4% Part D
Slide 6: Anoro and Incruse
Anoro and Incruse US LAMA containing market share NBRx LAMA containing US market 15.5% growth of ~3-4% in Q2 NBRx 12.2% Anoro + Incruse TRx volume now >35k weekly, supported by: NRx TRx 9.2% TRx 8.5% NRx • Anoro promotions focussed on 8.2% 7.7% initial maintenance therapy • Launch of Incruse in open
Slide 7: Dolutegravir (DTG) US performance
Dolutegravir (DTG) US performance Weekly TRx market share (STR + core agent) – since Tivicay launch 30% 25% HIV US market growth of ~13% in Q2 DTG franchise 20% 19.1% Competitor franchise DTG TRx volume >21k weekly with 15% Competitor nearly 1 in 5 patients on a DTG franchise regimen 10% The DTG por
Slide 8: Focused strategy and fast integration driving momentum in Consumer Healthcare
Focused strategy and fast integration driving momentum in Consumer Healthcare 7% sales growth CER in Q2 (+6% in H1) • Innovation* ~14% of net sales (15% in H1) • Power brands** sales up double digits Integrating at pace • Over 95% site consolidations complete • Notice served on over 70% of TSAs*** 1
Slide 9: Headline results from Q2 and H1
Headline results from Q2 and H1 Core results Q2 2016 Q2 Growth H1 2016 H1 Growth £m £m CER% £% £m CER% £% Turnover 6,532 4 11 12,761 6 11 Core operating profit 1,831 15 36 3,390 14 28 Core EPS 24.5p 16 42 44.3p 12 28 Total results* Q2 2016 Q2 Growth H1 2016 H1 Growth £m £m CER% £% £m CER% £% Turnove
Slide 10: Results reconciliation
Results reconciliation Q2 and H1 2016 Intangible amortisation and Major Transaction Divestments Q2 Total Results impairment restructuring Legal related* and other Core Results Turnover (£bn) 6.5 6.5 Operating profit (£bn) (0.2) 0.1 0.2 0.0 1.8 (0.2) 1.8 EPS (pence) (9.0) 2.2 3.7 0.4 29.9 (2.7) 24.5
Slide 11: Q2 2016 sales and core operating profit margin
Q2 2016 sales and core operating profit margin Growth in all three businesses, combined with cost control and restructuring Sales Core operating margin 2015 Q2 reported sales £5.9bn 2015 Q2 reported margin 22.9% Pharma +2% COGS were flat CER COGS as % of sales Vaccines +11% SG&A +2.2% Consumer +7% R
Slide 12: Restructuring on track
Restructuring on track £2.3 bn delivered to date, on track to deliver £3bn in total £bn* Total costs of £5bn achieved • ~£3.65bn cash expected • ~£1.35bn non cash 3.0 …Of which £3.2bn Structural 2.3 2.4 expensed to date: savings 0.2 June Dec 1.6 • £2.6bn cash 0.6 • £0.6bn non cash 2014 2015 2016 201
Slide 13: Financial efficiency
Financial efficiency Sustained contribution from financial architecture 2015 H1 2016 H1 2016 full year outlook Core £m £m Operating profit 2,654 3,390 Net finance expense (334) (322) Modest increase, reflecting higher debt Share of associates 5 (2) Tax (464) (648) 20% to 21% Tax rate 20.0% 21.1% Min
Slide 14: Cash generation and net debt
Cash generation and net debt £m 1,332 241 143 600 969 14,910 2,033 Funded by the proceeds of the 13,578 1,135 transaction with Novartis 10,727 Net debt Underlying Ordinary Special Restructuring Net disposals Legal & other FX impact Net debt 31/12/2015 free cash flow* dividends dividend & 30/06/2016
Slide 15: Earnings and returns to shareholders
Earnings and returns to shareholders 2016 Core EPS guidance Expect 11-12% growth CER Dividends Plan to pay annual ordinary dividend of 80p per share in 2016-17 *If exchange rates were to hold at June closing rates for the rest of 2016, the estimated positive impact on 2016 Sterling turnover would be
Slide 16: Currency
Currency 2016 rates If exchange rates were to hold at June closing rates for the rest of 2016, the estimated positive impact on 2016 Sterling turnover would be around 9% and if exchange losses were recognised at the same level as in 2015, the estimated positive impact on 2016 Sterling core EPS would