Gsk Plc · LSE:GSK
Gsk — Q2 2021 Earnings Presentation
33 slides from Gsk's earnings presentation, Jul 28, 2021
Slide 1: Q2 2021 results
Q2 2021 results 28 July 2021
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 Q2 2021 progress Emma Walmsley Luke Miels Deborah Waterhouse Growth drivers Dr. Hal Barron Brian McNamara Q2 2021 financial results Iain Mackay Roger Connor Q&A David Redfern 3
Slide 4: Q2 2021 progress
Q2 2021 progress Emma Walmsley
Slide 5: Q2 2021: Strong financial performance and execution of strategic priorities
Q2 2021: Strong Strong Q2 financial performance: Sales +15%; Adjusted EPS +71% CER financial performance Double-digit growth in New and Specialty Pharma and Vaccines and execution of strategic priorities Good growth in Consumer Healthcare Confident in delivering FY 2021 Adjusted EPS guidance R&D del
Slide 6: Progress made across all strategic priorities in Q2
Progress made across all strategic priorities in Q2 Positive Ph2/3 data: Approvals/opinions: Submissions: daprodustat Benlysta LN and Rolling NDA for COVID vaccines sotrovimab LA cabotegravir PrEP Innovation ViiV/Halozyme: GSK/iTeos: GSK/Alector^: ultra long-acting HIV EOS-448 anti-TIGIT AL001 & AL1
Slide 7: Priority is to unlock potential and maximise value for shareholders
Priority is to unlock potential and maximise value for shareholders Step-change in growth and performance • Expected sales growth more than 5% and adj. operating profit growth more than 10% CAGR 2021-26¹ New GSK • Sales ambition of more than £33 billion (CER) by 2031 GSK Strong prospects for growth
Slide 8: Growth drivers
Growth drivers Luke Miels Deborah Waterhouse Dr. Hal Barron Brian McNamara
Slide 9: Shingrix: strong underlying demand supports confidence in recovery
Shingrix: strong underlying demand supports confidence in recovery Volumes increasing as individuals complete COVID-19 US recovery on track for H2 2021 vaccination series US NBRx1 and COVID-19 vaccination in 50+2 US TRx 2020 vs 20214 350,000 80 80 300,000 US 50+ Shingrix NBRx COVID-19 vaccinated 70
Slide 10: Recent oncology launches contributing to growth
Recent oncology launches contributing to growth Zejula: US 1LM share grows despite COVID environment1,2 Blenrep: demand shifting to earlier lines with US community oncologists3 350 40% 0 0 Zejula 1LM 100% 300 30% Share 7L+ 80% 41% Surgeries 52% 56% 6L 250 20% 60% 25% 5L Expected level 40% 21% 200 10
Slide 11: HIV: Delivering sustainable growth
HIV: Delivering sustainable growth Dovato switch* continues to grow strongly Compelling data presented at IAS Congress Dovato: • 48 week data for SALSA study demonstrate comparable efficacy and safety vs broad range of 3DRs, reinforcing Dovato use in a switch setting • 48 week data for STAT study de
Slide 12: daprodustat: potential to be best in class for anaemia of chronic kidney disease
daprodustat: potential to be best in class for anaemia of chronic kidney disease • Five phase III studies All five studies met primary • >8,000 patients treated for up to efficacy endpoint 3.75 years • Dialysis/ non-dialysis and Non-inferior vs erythropoietin incident dialysis patients in risk of MA
Slide 13: Three significant business development transactions in Q2
Three significant business development transactions in Q2 Two clinical stage potential first-in- anti-TIGIT enabling novel next- ENHANZE® drug delivery class mAbs for neurodegenerative generation IO combinations technology to enable diseases* EOS448/GSK ‘859 Phase 1 dose development of “ultra long-
Slide 14: Significant upcoming R&D data points in next 18 months
Significant upcoming R&D data points in next 18 months H2 2021 data readouts: Specialty Select pivotal data in 2022: Specialty and Vaccines daprodustat ASCEND Phase 3 Blenrep: DREAMM-3 H1 2022 Anaemia of CKD 3L multiple myeloma Blenrep GSI combination Blenrep: DREAMM-8 H2 2022 r/r multiple myeloma c
Slide 15: Consumer Healthcare: Q2 revenue +7%
Consumer Healthcare Q2 Revenue +7%1, strong underlying category performance Q2 Performance Growth CER (%) • Continuing sales1 Q2 +7% vs flat Q2 202: Q22 2020 Q21 2021 • 2% drag from systems cutover benefit in Q2 prior Oral health (1) 12 year Pain relief (2) 13 • strong performance in most categories
Slide 16: Consumer Healthcare: on track to create leading global consumer healthcare company
Consumer Healthcare On track to create leading global consumer healthcare company Key Milestones • Divestment program completed in Q1 21 – with sales from brands divested under review in Q2 £33m (vs £116m Q2 20) and H1 £84m (vs £380m H1 20) • Integration: On track • Commercial now fully complete • 3
Slide 17: Q2 2021 results
Q2 2021 results Iain Mackay
Slide 18: Headline results
Headline results Reported Reported Q2 2021 H1 2021 % % £m AER CER £m AER CER Turnover 8,092 6 15 15,510 (7) (1) Total operating profit 1,675 (41) (30) 3,368 (31) (21) Total EPS 27.9p (39) (28) 49.4p (36) (27) Adjusted operating profit 2,158 23 43 4,039 (9) 3 Adjusted EPS 28.1p 46 71 51.0p (10) 2 Fre
Slide 19: Results reconciliation Q2 2021
Results reconciliation Q2 2021 Disposals, significant Total Intangible Intangible Major Transaction legal and Separation Adjusted results amortisation impairment restructuring related other costs results Turnover 8.1 8.1 (£bn) Operating 1.7 0.2 < 0.1 0.1 0.1 (0.1) 0.1 2.2 profit (£bn) EPS 27.9 3.2 0
Slide 20: Group sales and adjusted operating margins
Group sales and adjusted operating margins Q2 2021 Sales Adjusted operating margin All figures £m Q2 2020 sales at ’20 rates 7,624 Q2 2020 margin 22.9% Pharma up +12% CER 504 COGS up +9% CER 1.6% Vaccines up +49% CER 556 SG&A up +5% CER 3.0% +5.6% CER Consumer up +3% CER 69 R&D up +6% CER 1.1% Corpo
Slide 21: Adjusted operating profit to net income
Adjusted operating profit to net income Continued delivery of financial efficiency 2Q20 2Q21 £m £m Operating profit 1,749 2,158 Net finance expense (227) (185) Share of associates 19 16 Tax (316) (366) Tax rate 20.5% 18.4% Non-controlling interests (267) (216) Net income 958 1,407 21
Slide 22: Free cashflow of £0.3bn
Free cashflow of £0.3bn £m Key drivers H120 free cash flow 2,480 - Adverse timing of RAR and taxes - Lower trade receivable collections Lower CCL 29 - Increased inventory - Adverse exchange impacts Lower net operating cash** 2,051 + Increased adjusted operating profit Higher net Capex* 431 - Increas
Slide 23: Pharmaceuticals Q2 2021
Pharmaceuticals Q2 2021 Sales Operating profit & margin Sales factors All figures £m +720bps CER +560bps AER New and Specialty growth Q2 2021 Total : £4,229m: +12% CER; +3% AER 29.3% Favourable comparator due to +25% CER destocking in Q2 2020 +14% AER Flat CER -8% AER 23.8% Favourable US return and
Slide 24: Vaccines Q2 2021
Vaccines Q2 2021 Sales Operating profit & margin Sales factors All figures £m +1,140bps CER +930bps AER Pandemic adjuvant sales Q2 2021 Total : £1,571m: +49% CER; +39% AER 32.7% +24% CER Paediatric and adolescent demand +16% AER COVID-19 vaccination programme 1,311 impact on routine adult vaccinatio
Slide 25: Consumer Healthcare Q2 2021
Consumer Healthcare Q2 2021 Sales Operating profit & margin Sales factors All figures £m +50bps CER -10bps AER Continued innovation benefit Q2 2021 Total : £2,292m: +3% CER; -4% AER 21.8% Favourable comparator due to Q1 2020 +7% CER 21.7% -1% AER accelerated purchase unwind 2,273 2,259 Impact of div
Slide 26: 2021 outlook: Confident in delivering FY guidance
2021 outlook Confident in delivering FY guidance Group H1 performance Group Q3 considerations Group Q4 considerations Sales £15,510m, -1% CER Unfavourable year-on-year Adj EPS growth in H2 to be Adj OP £4,039m, +3% CER comparators in R&D and SG&A weighted to Q4 Adj EPS 51.0p, +2% CER, including due
Slide 27: Q&A session
Q&A session
Slide 28: Appendix
Appendix
Slide 29: 2021 outlook
2021 outlook Adj EPS/Dividend Adj operating costs Other Adj financials Adj EPS guidance: Adj SG&A and R&D: Royalties: Mid to high-single digit decline at CER, Tight cost control, with targeted Between £300-350m excluding COVID-19 solutions investments, and restructuring benefits Net finance expense:
Slide 30: Expected costs and savings under Major Restructuring Programmes & Consumer Separation
Expected costs and savings under Major Restructuring Programmes & Consumer Separation £bn Cumulative H1 2021 2021 2022 2023 Date Actuals to Announced 2021 Average 2020 1 Total Actuals Projected Rates Lifetime Savings 2 0.3 0.4 0.5 0.5 2018 Restructuring Q2’18 Total charges 1.5 - 0.1 1.6 Programme (I
Slide 31: Our R&D pipeline: 63 potential vaccines and medicines
Our R&D pipeline 63 potential vaccines and medicines Phase I Phase II Phase III/Registration C. difficile* vaccine COVID-19 (SK Bioscience)*Ɨ1 vaccine Bexsero infants (US) vaccine Klebsiella pneumoniae* vaccine Infectious Diseases Malaria (fractional dose)* vaccine COVID-19 (Medicago)*Ɨ vaccine HIV
Slide 32: Our R&D pipeline: upcoming late-stage milestones
Our R&D pipeline Upcoming late-stage milestones that will inform our progress 2H 2021 2022 Regulatory decisions Shingrix immuno-compromised cabotegravir – HIV PrEP; 1H 2022 Jemperli^ – dMMR/MSI-H solid tumors MMR vaccine (US); mid 2022 Nucala – nasal polyposis Regulatory Blenrep DREAMM-3 – 3L+ multi
Slide 33: Our R&D pipeline: changes in the portfolio since Q1 2021
Our R&D pipeline Changes in the portfolio since Q1 2021 New to Phase I New to Phase II New to Phase III New to Registration VIR-24821 (neutralizing monoclonal GSK’109 (broadly neutralizing antibody) AL0012 (anti-sortilin monoclonal antibody) MMR (US) vaccine antibody) influenza HIV FTD-GRN: frontote