Gsk Plc · LSE:GSK
Gsk — GlaxoSmithKline — FY2001 Earnings Presentation
48 slides from Gsk's earnings presentation, Feb 14, 2002
Slide 1: Full Year Results 2001
Full Year Results 2001 Presentation to Investors/Analysts 14th February 2002 JP Garnier Chief Executive Officer
Slide 2: Strong Sales and EPS Performance in Q401
Strong Sales and EPS Performance in Q401 2001 % change Business Performance £bn CER Sterling Sales 5.6 +11 +12 - Pharma 4.7 +12 +12 - Consumer (incl. Block) 0.9 +24 +24 EPS 20.4p +14 +17 Note: % pharma change excludes products divested in 2000 2
Slide 3: Strong Sales and EPS Performance in 2001
Strong Sales and EPS Performance in 2001 2001 % change Business Performance £bn CER Sterling Sales 20.5 +11 +13 - Pharma 17.2 +12 +15 - Consumer (incl. Block) 3.3 +22 +24 EPS 72.4p +14 +19 Note: % pharma change excludes products divested in 2000 3
Slide 4: GSK Merger Update
GSK Merger Update • Financial Strength • Marketing Power • Superior R&D Productivity 4
Slide 5: Financial Strength
Financial Strength • PBT £6.2bn • Net operating cash flow £5.6bn • Net debt £2.1bn • Share Buy Back: £4.0bn 5
Slide 6: Marketing Power
Marketing Power GSK USA GSK Europe 8.7% market share 7.2% market share No. 2 company No. 1 company 8,000 reps 9,000 reps IMS Data; MAT Sept 2001 6
Slide 7: Marketing Power - Paxil in Japan
Marketing Power - Paxil in Japan Market GBPm Share 10 46% Paxil 8 Luvox (Fluvoxamine) Depromel (Fluvoxamine) Milnacipran 6 22% 4 19% 13% 2 0 2000 Nov. Dec. 2001 Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Oct. Jan. Source: IMS 7
Slide 8: Seretide in Australia
Seretide in Australia Monthly revenue performance 3500 3000 Sales Revenue (£000s) 2500 Seretide Flixotide 2000 Pulmicort Becotide 1500 Serevent Oxis 1000 Foradil 500 0 Aug-98 Feb-99 Aug-99 Feb-00 Aug-00 Feb-01 Aug-01 Source: IMS 8
Slide 9: Marketing Power: Sales Force Quality
Marketing Power Sales Force Quality: Scott-Levin 2001 Key Physician Groups GSK Rank • General / Family Practitioners #1 • Pediatricians #1 • Pulmonologists #1 • Internists #2 • Psychiatrists #2 9
Slide 10: GlaxoSmithKline – One of the Fastest Growing US Companies
GlaxoSmithKline – One of the Fastest Growing US Companies! 2001 Growth J&J +26% GSK +21% Pharmacia +19% US Market +18% Novartis +17% Astra Zeneca +17% Wyeth +16% Merck +15% Pfizer +14% BMS + 9% Lilly +8% Source: IMS USA $ growth for top 10 companies 10
Slide 11: Superior R&D Productivity
Superior R&D Productivity • CEDDs fully operational Anti-bacterials Anti-bacterials && Host Host Defense Defense CV, CV, Cancer Cancer && Respiratory Respiratory & & Urogenital Urogenital Inflammation Inflammation Neurology Neurology Metabolic, Metabolic, Musculoskeletal Musculoskeletal Vaccines Vac
Slide 12: Superior R&D Productivity - NCEs in phase I/II
Superior R&D Productivity - 42 NCEs in phase I/II 270773 - sepsis 181771 - obesity Anti-microbials/ 427353 - diabetes & obesity S-1360 - HIV Metabolic Anti-viral 418790 - diabetes & obesity 249417 - sepsis & stroke sitamaquine - lieshmaniasis 273005 - osteoporosis & arthritis 409544 - dyslipidemia 3
Slide 13: R&D Strategies
R&D Strategies Projects in Clinic • 27 Phase I NCEs • 15 Phase II NCEs Outstanding #1 Prioritize • 22 Vaccines Blockbusters late-stage pipeline • 41 PLEs 2002 2004/05 13
Slide 14: R&D Strategies: Exploit PLE
R&D Strategies #2 Exploit Significant PLE Projects in Clinic Opportunities • 27 Phase I NCEs • 15 Phase II NCEs Outstanding #1 Prioritize • 22 Vaccines Blockbusters late-stage pipeline • 41 PLEs 2002 2004/05 14
Slide 15: Selected PLEs
Selected PLEs • Advair for COPD • Augmentin ES / XR • Avandia and Metformin combination • GW 433908 • Lamictal for bipolar depression • Paxil (SAD, GAD, PTSD, PMDD) • Infanrix PeNta & HeXa • Trizivir • Wellbutrin XL (once daily) 15
Slide 16: R&D Strategies: Supplement with In-licensing
R&D Strategies #2 Exploit Significant PLE Projects in Clinic Opportunities • 27 Phase I NCEs • 15 Phase II NCEs #1 Prioritize Outstanding • 22 Vaccines Blockbusters late-stage pipeline • 41 PLEs #3 2002 Supplement 2004/05 with In-licensing
Slide 17: Major In-licensing Activities
Major In-licensing Activities* Bayer Vardenafil ED Filed Biovail Wellbutrin SR Once Daily Depression 1H2002 Roche Ibandronate osteoporosis Phase III Merck KGaA SSRI/5HT1a partial agonist Depression Phase II/III Sepsicure Endotoxin Binder Sepsis Phase II/III Shionogi JV 4 New compounds HIV + CNS Phas
Slide 18: Expected Launches 2002
Expected Launches 2002 Infanrix PeNta Advair for COPD Vaccines Bexxar PLEs Avolve NCEs (dutasteride) vardenafil Launches Note: Augmentin XR and Factive also under discussion with FDA. 18
Slide 19: Expected Launches and Filings 2002
Expected Launches and Filings 2002 MMR-V (EU) Infanrix PeNta GW433908 Advair for COPD Lamictal for bipolar depression Vaccines Bexxar Wellbutrin XL PLEs (once daily) NCEs Avolve (dutasteride) ibandronate vardenafil Ariflo Launches Filings Note: Augmentin XR and Factive also under discussion with FDA
Slide 20: 2002 & 2003 Earnings Guidance
2002 & 2003 Earnings Guidance* The Company expects 2002 EPS growth in the mid-teens, and 2003 EPS growth of low- teens or better. * Earnings guidance represents growth at constant exchange rates and excludes merger, restructuring costs and disposals of subsidiaries. Forecasts assume that the company
Slide 21: Financial Results
Financial Results John Coombe Chief Financial Officer
Slide 22: Statutory Results
Statutory Results Business Exceptional Total Total Performance Items* 2001 2000 £m £m £m £m Sales 20,489 20,489 18,079 Trading profit 6,053 (1,356) 4,697 4,455 Profit before tax 6,169 (1,652) 4,517 6,029 EPS 72.4p (22.0p) 50.4p 68.5p *Costs associated with merger & restructuring and disposal of subs
Slide 23: Savings on track for higher target
Savings on track for higher target £bn £1.80bn £1.80bn £1.25bn £1.25bn Manufacturing Restructuring £0.75bn £0.75bn Merger £350m £0.20bn £0.20bn £400m 2000 2001 2002 2003 Targets as revised Q2 2001 23
Slide 24: Q401 Business Performance Results
Q401 Business Performance Results 2001 2000 % change £m £m CER Reported Sales 5,616 5,029 11 12 Trading profit 1,726 1,407 21 23 Other operating (expense)/income 5 148 Associate profits 17 14 Net interest expense (18) (44) Profit before tax 1,730 1,525 11 13 Tax rate 26.7% 27.3% Earnings 1,232 1,060
Slide 25: 2001 Business Performance Results
2001 Business Performance Results 2001 2000 % change £m £m CER Reported Sales 20,489 18,079 11 13 Trading profit 6,053 5,026 16 20 Other operating (expense)/income 37 274 Associates 71 65 Profits on disposal 96 144 Net interest expense (88) (182) Profit before tax 6,169 5,327 12 16 Tax rate 26.7% 27
Slide 26: EPS +14% with significantly lower reliance on one-time gains
EPS +14% with significantly lower reliance on one-time gains £418m £133m 2000 2001 2002 Other Other Income Income ++ Profits Profits on on Disposal Disposal 26
Slide 27: Performance by Operating Division
Performance by Operating Division 2001 2000 Growth £m £m CER % Sales Pharmaceuticals Continuing 17,205 14,982 12 Total (incl. divested products) 17,205 15,429 9 Consumer Healthcare Continuing 2,690 2,631 1 Total (incl. Block and divested prods.) 3,284 2,650 22 Trading Profit Total Pharmaceuticals 5,
Slide 28: Trading Profit Analysis
Trading Profit Analysis 2001 2000 Change £m £m CER% Sales 20,489 18,079 11 Cost of goods 4,430 3,811 15 21.6% 21.1% S,G&A 7,451 6,732 8 36.4% 37.2% R&D 2,555 2,510 (1) 12.5% 13.9% Trading profit 6,053 5,026 16 29.5% 27.8% 28 % % in in italics italics are are % % of of sales sales
Slide 29: Strong Cash Flow of £5.6bn
Strong Cash Flow of £5.6bn 2001/£m 2000/£m Net Operating Cash Flow 5,572 4,339 Merger & restructuring (973) (459) Free Cash Flow 4,599 3,880 Capital expenditure (1,115) (1,007) Dividends paid (2,325) (2,028) Sale/Disposal of Investments 263 444 Purchase of Block (742) - Sale of Divested Products (30
Slide 30: 2001 Financial Highlights
2001 Financial Highlights • Strong business performance; EPS above target • Cost savings increased to £1.8bn • Trading margin improving • Improved quality of earnings through lower one-time gains • Strong cash generation • £4bn share buy-back programme 30
Slide 31: Pharmaceutical Sales
Pharmaceutical Sales Bob Ingram Chief Operating Officer
Slide 32: Sales by Therapy Area - 2001
Sales by Therapy Area - 2001 % growth - twelve months ended 31st December 2001 £1663m (0%) % share £838m £4,007m (+14%) (+16%) CNS 23 £948m (+10%) Respiratory 21 Anti-Bacterials 15 £1480m (+10%) Anti-Virals 12 £3537m Metabolic/GI 9 (+24%) £2128m Vaccines 5 (+10%) Oncology 5 £2604m (+3%) Others 10 To
Slide 33: Strong Sales Performance in Q401
Strong Sales Performance in Q401 • Global pharma sales +12%; US +15% • US underlying growth +15%; some individual products impacted by stocking patterns - e.g., Reported Est. Underlying US Product Growth Growth Avandia (33%) +21% Flovent (35%) (11%) Serevent (28%) (15%) Paxil +34% +12% Augmentin +25
Slide 34: Central Nervous System
Central Nervous System Twelve months ended 31st December 2001 World USA Europe RoW % % % % £m chg £m chg £m chg £m chg Seroxat/Paxil 1,857 16 1,252 13 378 12 227 41 Imigran/Imitrex 758 4 575 1 136 7 47 34 Wellbutrin 647 37 628 37 - - 19 27 Lamictal 355 20 179 23 139 18 37 12 Total CNS 4,007 16 2,835
Slide 35: Paxil: US Market Share Since launch of GAD campaign
Paxil: US Market Share Since launch of GAD campaign Oct ‘01 18.9 19 Paxil Zoloft 18.4 18.1 18 17.2 17 16 Week Ending 28th Sep 01 18th Jan 02 Source: Scott Levin (Retail NRx) 35
Slide 36: Anti-Viral
Anti-Viral Twelve months ended 31st December 2001 World USA Europe RoW % % % % £m chg £m chg £m chg £m chg HIV 1,347 14 794 11 405 16 148 31 Valtrex 350 42 212 38 69 18 69 99 Zovirax 296 (19) 43 (1) 88 (17) 165 (24) Zeffix 103 49 7 29 12 60 84 50 Total Anti-Viral 2,128 10 1,071 11 589 9 468 8 % chan
Slide 37: Today's HIV Treatment Needs
Today’s HIV Treatment Needs Combo treatments in one pill TRIZIVIR & No food/water restrictions COMBIVIR & Low pill burden NEW THERAPIES Good resistance profile 37
Slide 38: Anti-Bacterial
Anti-Bacterial Twelve months ended 31st December 2001 World USA Europe RoW % % % % £m chg £m chg £m chg £m chg Augmentin 1,421 13 912 21 322 (2) 187 6 Other Anti-Bacterial 1,183 (6) 392 (10) 380 (1) 411 (8) Total Anti-Bacterial 2,604 3 1,304 10 702 (1) 598 (4) 38 % change is at constant exchange rat
Slide 39: Augmentin ES – 31% conversion since launch
Augmentin ES – 31% conversion since launch (Oct ‘01) Aug Regular 31% Suspension Aug ES Suspension 69% Chart shows portion of total suspension TRxs week of Jan 18, 2002 39 Suspension represents 40% of total Augmentin Rx (adult/tablets 60%)
Slide 40: GI/Metabolic
GI/Metabolic Twelve months ended 31st December 2001 World USA Europe RoW % % % % £m chg £m chg £m chg £m chg Avandia 707 46 623 37 32 >100 52 >100 Zantac 505 (11) 106 (16) 162 (15) 237 (5) Other GI/Metabolic 268 (7) 1 (99) 105 (2) 162 15 Total GI/Metabolic 1,480 10 730 17 299 (3) 451 9 40 % change i
Slide 41: Avandia provides sustained glycemic control
Avandia provides sustained glycemic control for up to 2 1/2 years as monotherapy 9.0 Avandia 8mg/day (n=217) 8.5 HbA1c (%) 8.0 7.5 7.0 6.5 0 3 6 9 12 15 18 21 24 27 30 Time (months) Studies 011, 024, 084, 105 41 Data on File, GlaxoSmithKline.
Slide 42: Vaccines
Vaccines Twelve months ended 31st December 2001 World USA Europe RoW % % % % £m chg £m chg £m chg £m chg Hepatitis vaccines 445 (6) 187 9 183 (14) 75 (15) Infanrix 238 36 72 97 116 16 50 32 Other vaccines 265 25 2 (81) 97 16 166 40 Total Vaccines 948 10 261 20 396 0 291 19 42 % change is at constant
Slide 43: Respiratory
Respiratory Twelve months ended 31st December 2001 World USA Europe RoW % % % % £m chg £m chg £m chg £m chg Seretide/Advair 850 >100 328 >100 441 >100 81 >100 Flixotide/Flovent 915 2 470 9 263 (15) 182 18 Serevent 645 1 381 10 225 (13) 39 4 Key asthma prd’s 2,410 38 1179 52 929 24 302 38 Flixonase/F
Slide 44: Seretide/Advair Diskus
Seretide/Advair Diskus • Already #4 product globally; #1 in Europe • One of best ever US launches • Unsurpassed efficacy in asthma • Diskus is hugely popular device • Positive vote on US approval for COPD 44
Slide 45: COPD Opportunity
COPD Opportunity • COPD is a growing health problem with significant under-diagnosis – In US, 21m affected but only 4.3m treated • Treatment paradigms are shifting – New guidelines e.g. GOLD support use of ICS and LABAs as early therapy • GSK is well positioned – Serevent promotion from 1998;DTC on-
Slide 46: COPD Opportunity
COPD Opportunity • COPD is a growing health problem with significant under-diagnosis – In US, 21m affected but only 4.3m treated • Treatment paradigms are shifting – New guidelines e.g. GOLD support use of ICS and LABAs as early therapy • GSK is well positioned – Serevent promotion from 1998;DTC on-
Slide 47: GSK: Positioned for Growth
GSK: Positioned for Growth • Strong, balanced portfolio • Great marketing machine • Significant 2002 opportunities 47
Slide 48: Questions
ask oe... Kline