Slide 1: Q3 2018 Results
Q3 2018 Results 31 October 2018
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 Q3 2018 progress Emma Walmsley, Chief Executive Officer Pharma update Luke Miels, President, Global Pharmaceuticals David Redfern, Chief Strategy Officer, Chairman of ViiV Healthcare Q3 2018 financial results Simon Dingemans, Chief Financial Officer Q&A: Dr Hal Barron, Chief Scientific Office
Slide 4: CER Sales growth in all businesses; improved Group operating margin
CER Sales growth in all 3 businesses; improved Group operating margin Pharmaceuticals New Respiratory products +40%* Group sales growth +3% of +6% HIV sales +12%; dolutegravir +17% Benlysta growth of +31% 20bp improvement in Group Adjusted operating margin Vaccines Shingrix reported sales of £286 mi
Slide 5: Long-term priorities for all businesses: Innovation, Performance, Trust
3 long-term priorities for all 3 businesses Innovation Performance Trust Culture 5
Slide 6: Pharma update
Pharma update Luke Miels, President, Global Pharmaceuticals David Redfern, Chief Strategy Officer, Chairman of ViiV Healthcare
Slide 7: Increasing focus and prioritisation to support future growth
Increasing focus and prioritisation to support future growth Focus resources on key Investing in priority Building our capability in products markets Specialty Shingrix US New talent with Specialty experience Bexsero China Co-location of development Trelegy and commercial in Oncology Nucala Changes
Slide 8: Shingrix: continued strong launch execution
Shingrix: continued strong launch execution Demand remains significantly higher than 2017 Building a new standard of prevention Weekly Shingrix TRx volume vs 2017 competitor Recommendations expanding market in US (weekly pharmacy administered doses) ~1/3 receiving vaccine under age 65 250,000 ~1/3 p
Slide 9: Benlysta: maximising the growth opportunity
Benlysta: maximising the growth opportunity Double-digit growth annually Potential to address unmet patient need First and only medicine for SLE 1 in >50 years; Annual Sales Progression demonstrated efficacy in four Phase 3 clinical trials 400 17% Subcutaneous (SC) launch delivering with faster upta
Slide 10: HIV performance on track
HIV performance on track ATLAS and FLAIR studies building confidence in long-acting injectable agents Non-inferior virologic outcomes; Dolutegravir maintaining 28% share of resistance profile similar to LATTE & STR/Core agent market LATTE-2 studies ATLAS and FLAIR studies demonstrate non-inferior We
Slide 11: Q3 2018 financial results
Q3 2018 financial results Simon Dingemans, CFO
Slide 12: Headline results
Headline results Continued sales growth and investment in the future 9 months Reported growth % Reported growth % Q3 2018 2018 £m AER CER £m AER CER Turnover 8,092 3 6 22,624 - 4 Total operating profit 1,910 2 7 3,929 10 22 Total EPS 28.8p 16 23 49.0p 15 30 Adjusted operating profit 2,524 2 6 6,549
Slide 13: Results reconciliation
Results reconciliation Q3 2018 results Disposals, Total Intangible Intangible Major Transaction significant Adjusted results amortisation impairment restructuring related legal and other results Turnover 8.1 8.1 (£bn) Operating 1.9 0.1 <0.1 0.3 0.2 (0.1) 2.5 profit (£bn) EPS 28.8 2.3 0.9 4.4 3.6 (4.
Slide 14: Sales growth
Sales growth Another quarter of growth across all three businesses: +3% AER, +6% CER Q3 2018 9 months 2018 All figures £m All figures £m Q3 2017 sales at '17 rates 7,843 9M 2017 sales at '17 rates 22,547 Pharma up 3% CER 112 Pharma up 2% CER 238 Vaccines up 17% CER 284 Vaccines up 15% CER 610 Consum
Slide 15: Adjusted operating margin
Adjusted operating margin Investment in new products, funded by cost efficiencies Q3 2018 9 months 2018 Sales up 6% CER Sales up 4% CER Q3 2017 operating margin 31.5% 9M 2017 operating margin 29.0% COGS up 5% CER 0.3% COGS up 4% CER 0.1% SG&A up 4% CER 0.5% +0.2% SG&A up 4% CER 0.1% +0.7% CER R&D up
Slide 16: Improved cash generation
Improved cash generation Clearer prioritisation and tighter control £m 9M 2017 free cash flow 1,668 Higher net operating cash (incl. negative currency)* 362 Lower net Capex** 291 Lower restructuring payments 96 Lower distributions to minorities 76 Proceeds from sale of intangible assets 141 Higher C
Slide 17: Updated 2018 guidance
Updated 2018 guidance Previous 2018 guidance Adjusted EPS growth Updated guidance + 7 to 10% CER with no Advair Gx Shingrix upgrade Adjusted EPS growth Adjusted EPS growth + 8 to 10 % CER Advair Gx delayed + 4 to 7% CER with Advair Gx from 1 Oct FY Advair sales £900m Continued Respiratory pricing pr
Slide 18: 5-year outlook to 2020 reconfirmed at group level
5-year outlook to 2020 reconfirmed at group level 2020 outlook 2020 outlook from July 2017 today Assumptions Group Sales CAGR Stronger new product sales Group Sales CAGR Consumer buyout Growth at CER Low-to-mid Low-to-mid Lower tax rate single digit % single digit % 2015 exchange rates New major res
Slide 19: Confident in 2020 outlook
Confident in 2020 outlook Innovation Group sales 5 year CAGR low to mid single digit* Performance Adjusted EPS mid to high single digit* 5 year CAGR Trust *All 2020 outlook statements are at CER using 2015 exchange rates as the base. CAGRs are 5 years to 2020. 19
Slide 20: Appendix
Appendix
Slide 21: SYNBIoSe: belimumab+rituximab in patient pilot
Innovation SYNBIoSe: belimumab+rituximab in 16 patient pilot ISS* supported by GSK informs positive outlook SYNBIoSe Outcome: Study Investigate SLE** biomarkers (autoantibodies and NET • Reductions in autoantibodies and excessive objective: formation) after using a combination of rituximab and NET f
Slide 22: Belimumab+rituximab phase 3 study design
Innovation Belimumab+rituximab phase 3 study design Study initiated March 2018 BLISS-BELIEVE Study objective: Evaluate the efficacy and safety of Benlysta administered in combination with rituximab Population Adult patients with active Systemic Lupus Erythematosus (SLE) despite standard of care # of
Slide 23: Portfolio overview
Innovation Portfolio overview Phase 1 Phase 2 Pivotal/Registration Vaccines 2831781* (LAG3) ulcerative colitis 3196165* (GM-CSF inhibitor) RA belimumab+rituximab SLE** Rotavirus - Phase 3 (PCV free) 3008348 (aVb6 integrin antagonist) IPF 3389404*/3228836* (HBV ASO) HBV cabotegravir**+rilpivirine* HI
Slide 24: Changes in portfolio since Q2
Innovation Changes in portfolio since Q2 New to Phase 1 New to Phase 2 New to Pivotal New to Registration FTIH start: Submitted US/EU: 3439171 (HPGD2 synthase inh) muscle repair D3, dolutegravir+lamivudine HIV 3537142 (NY-ESO ImmTAC) cancer RSV vaccine older adults RSV vaccine maternal Removed from
Slide 25: Upcoming milestones that will inform our progress
Innovation Upcoming milestones that will inform our progress 2H 2018 1H 2019 2H 2019 1H 2020 2H 2020 Submission dolutegravir+lamivudine (D3) HIV fostemsavir (attachment inhibitor) HIV Trelegy asthma mepolizumab HES cabotegravir+rilpivirine HIV treatment GSK’916 (BCMA) 4L MM monotherapy mepolizumab N