Gsk Plc · LSE:GSK
Gsk — Q1 2019 Earnings Presentation
28 slides from Gsk's earnings presentation, May 1, 2019
Slide 1: Q1 2019 Results
Q1 2019 Results 1 May 2019
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 Q1 2019 progress Emma Walmsley, Chief Executive Officer Q1 2019 financial results Iain Mackay, Chief Financial Officer Pharma update Luke Miels, President, Global Pharmaceuticals David Redfern, Chief Strategy Officer, Chairman of ViiV Healthcare Summary Emma Walmsley, Chief Executive Officer
Slide 4: Emma Walmsley, CEO
Emma Walmsley, CEO 1 May 2019
Slide 5: Strong start to an important year of execution
Strong start to an important year of execution Pharmaceuticals New Respiratory products +25%* Group sales growth +2% CER HIV sales +4%; dolutegravir +7% of +5% Benlysta +15% Zejula sales of £42m** 1pp improvement in Group Adjusted Vaccines operating margin +20% CER Shingrix sales of £357m, > +100% M
Slide 6: Q1 progress made on our priorities
Q1 progress made on our 3 priorities 2019 focus ✔ Continued strong performance with new product launches Innovation • Strengthen pipeline ✔ US approval for Dovato in HIV • Execution of launches ✔ US submission for CAB+RPV in HIV ✔ Closed Tesaro acquisition and partnership with Merck KGaA1 Performanc
Slide 7: Q1 2019 financial results
Q1 2019 financial results Iain Mackay, CFO
Slide 8: Headline results
Headline results Q1 2019 Reported growth % £m AER CER Turnover 7,661 6 5 Total operating profit 1,428 15 10 Total EPS 16.8p 50 42 Adjusted operating profit 2,163 12 9 Adjusted EPS 30.1p 22 18 Free cash flow 165 (50) n/a 8
Slide 9: Results reconciliation
Results reconciliation Q1 2019 Disposals, Total Intangible Intangible Major Transaction significant Adjusted results amortisation impairment restructuring related legal and other results Turnover 7.7 7.7 (£bn) Operating 1.4 0.2 <0.1 0.4 (0.1) 0.2 2.2 profit (£bn) EPS 16.8 3.1 0.3 6.5 (0.7) 4.1 30.1
Slide 10: Pharmaceuticals
Pharmaceuticals Q1 2019 Sales Operating margin Sales All figures £m +2% CER -330bps CER +4% AER -340bps AER New launches: Trelegy, Nucala, Juluca 4,158 Advair AG & Ventolin AG stocking 4,009 33.2% 29.8% Initial sales from Zejula 490 631 Advair genericization impact 1,048 1,121 Established and older
Slide 11: Vaccines
Vaccines Q1 2019 Sales Operating margin Sales All figures £m +20% CER +1110bps CER +23% AER +1300bps AER Shingrix demand 1,522 Meningitis growth 40.3% Hepatitis CDC stockpile movements 1,238 357 Cervarix China comparator 110 180 209 Infanrix, Pediarix competition 27.4% 614 939 941 339 Operating prof
Slide 12: Consumer Healthcare
Consumer Healthcare Q1 2019 Sales Operating margin Sales All figures £m +1% CER +210bps CER Sensodyne performance flat AER +230bps AER 1,975 1,981 International performance 21.7% Ongoing turnaround in Europe 459 489 19.4% Divestments & phasing out of contract manufacturing c.1% Tough US cold & flu c
Slide 13: Sales and Adjusted operating margins
Sales and Adjusted operating margins Q1 2019 Sales Adjusted operating margin All figures £m Q1 2018 sales at '18 rates 7,222 Q1 2018 operating margin 26.6% Pharma up 2% CER 71 COGS up 2% CER 0.8% SG&A up 4% CER 0.2% +1.0% Vaccines up 20% CER 252 CER R&D up 6% CER 0.2% Consumer up 1% CER 12 Royalties
Slide 14: Adjusted operating profit to net income
Adjusted operating profit to net income Continued delivery of financial efficiency Q1 18 Q1 19 £m £m Operating profit 1,923 2,163 Net finance expense (139) (187) Share of associates 9 57 Tax (362) (400) Tax rate 20.2% 19.7% Minorities (224) (149) Net income 1,207 1,484 14
Slide 15: Free cash flow of £0.2bn
Free cash flow of £0.2bn £m Q118 free cash flow 329 Lower CCL 300 Lower net Capex* 52 Lower net operating cash** 382 Higher restructuring payments 70 Other*** 64 Q119 free cash flow 165 CCL: contingent consideration liability * Net Capex includes purchases less disposals of PP&E and intangibles 15 *
Slide 16: 2019 financial priorities
2019 financial priorities 2019 guidance Priorities Deliver improvements in working capital management and underlying cash generation Adjusted EPS Sharpen allocation of resources to key priorities including our Down 5 to 9% CER R&D pipeline and ensuring successful launch of new products Integration o
Slide 17: Pharma update
Pharma update Luke Miels, President, Global Pharmaceuticals David Redfern, Chief Strategy Officer, Chairman of ViiV Healthcare
Slide 18: Respiratory: continued strong growth from new products
Respiratory: continued strong growth from new products Trelegy: steady volume growth Nucala: competitive new SEA patients starts Total TRx Volume (US) Nucala new patient injection share (US) 65% 30k Nucala 25k 55% 20k Competitor X 15k 10k 45% 5k k 35% Steady growth continues after first full year on
Slide 19: Zejula continues to lead the PARP class in share of 2nd line maintenance
Zejula continues to lead the PARP class in share of 2nd line maintenance ovarian cancer patients Solid sales; opportunity for expansion PARPi patient share; 2L+ maintenance setting GSK reported sales of £42m in Q1 2019* 80% niraparib olaparib rucaparib Approved in 35 countries: 60% • Launched: US, G
Slide 20: Shingrix: US launch driving vaccines growth
Shingrix: US launch driving vaccines growth Strong uptake in US continues Capacity expansion on track 12m Sales of £357 million for Q1 2019 driven by 10m significant step up in supplies for US market 8m In US, demand remains high: 6m • >75% completing second dose in series 4m • ~35% under age 65 2m
Slide 21: HIV growth of 4% CER with DTG portfolio growth at +7% CER
HIV growth of 4% CER with DTG portfolio growth at +7% CER Juluca, our first 2DR, driving overall growth Dolutegravir US total share at around 26.6% CER growth Total HIV 30% Total HIV £1,121m +4% 26.6% £1,048m 25% 20% 17.5% 15% 12.4% +7% 12.4% 10% DTG 5% 1.8% 0% -35% other HIV 2018 Q1 2019 Q1 Tivicay
Slide 22: Momentum building behind 2DR strategy with Dovato launch
Momentum building behind 2DR strategy with Dovato launch and further data flow through 2019 Dovato US launch drives 2DR momentum 2019 data flow Dovato Q3 2019 GEMINI I&II 96-week study readout Q3 2019 Anticipated EU FDC approval Q3 2019 TANGO switch study readout Q4 2019 SALSA switch study begins On
Slide 23: Focus on delivering business priorities
Focus on delivering business priorities 2019 focus New global Innovation Pharmaceuticals and • Strengthen pipeline • Execution of launches Vaccines company with R&D focused on science of the immune system, human genetics and – Drive operating advanced technologies performance Performance • Driving g
Slide 24: Appendix
Appendix
Slide 25: 2019 outlook
2019 outlook EPS/Dividend Operating costs Other EPS guidance: unchanged SG&A and R&D Royalties Decline of 5 to 9% Addition of Tesaro cost base Broadly similar to 2018 Dividend R&D spend to pick up significantly Net finance expense Expect 80p for 2019 Around £900-950m Tax rate Around 19% Pharmaceutic
Slide 26: Pipeline is advancing well
Innovation Pipeline is advancing well Today: 45 medicines, 34 immunomodulators, and 13 vaccines Phase 1 Phase 2 Pivotal/Registration Vaccines 2831781* (LAG3) ulcerative colitis 3196165* (GM-CSF inhibitor) RA Benlysta + Rituxan SLE** Rotavirus – Phase 3 3358699* (BET targeted inhibitor) RA 3389404/32
Slide 27: Upcoming milestones that will inform our progress
Innovation Upcoming milestones that will inform our progress 1H 2019 2H 2019 1H 2020 2H 2020 1H 2021 Anticipated submission cabotegravir+rilpivirine LA HIV treatment2 ✓ fostemsavir (attachment inhibitor) HIV mepolizumab HES mepolizumab NP belimumab+rituximab SLE Zejula 4L ovarian cancer sNDA (QUADRA
Slide 28: Changes in portfolio since Q4
Innovation Changes in portfolio since Q4 Changes to pipeline New to Phase I New to Phase II New to Pivotal New to Registration GSK3745417 (STING agonist) cancer GSK3640254 (HIV maturation inhibitor) HIV GSK3036656 (leucyl t-RNA inhibitor) TB Removed from Phase I Removed from Phase II Removed from Pi