Gsk Plc · LSE:GSK
Gsk — Q2 2018 Earnings Presentation
11 slides from Gsk's earnings presentation, 2018
Slide 1: Q2 2018 financial results
Q2 2018 financial results Simon Dingemans, CFO
Slide 2: Headline results
Headline results Continued sales growth and investment in the future Q2 2018 Reported growth % H1 2018 Reported growth % £m AER CER £m AER CER Turnover 7,310 - 4 14,532 (1) 4 Total operating profit 779 >100 >100 2,019 19 39 Total EPS 9.0p >100 >100 20.2p 14 41 Adjusted operating profit 2,102 1 7 4,0
Slide 3: Results reconciliation
Results reconciliation Q2 2018 results Disposals, Total Intangible Intangible Major Transaction significant Adjusted results amortisation impairment restructuring related legal and other results Turnover 7.3 7.3 (£bn) Operating 0.8 0.1 <0.1 0.2 1.0 <(0.1) 2.1 profit (£bn) EPS 9.0 2.3 0.4 2.5 14.0 (0
Slide 4: Sales growth
Sales growth Another quarter of growth across all three businesses: +4% CER, flat AER Q2 2018 H1 2018 All figures £m All figures £m Q2 2017 sales at '17 rates 7,320 H1 2017 sales at '17 rates 14,704 Pharma up 1% CER 44 Pharma up 1% CER 126 Vaccines up 16% CER 180 Vaccines up 14% CER 326 Consumer up
Slide 5: Adjusted operating margin
Adjusted operating margin Investment in new products, funded by cost efficiencies Q2 2018 H1 2018 Sales up 4% CER Sales up 4% CER Q2 2017 operating margin 28.5% H1 2017 operating margin 27.6% COGS up 7% CER 0.8% COGS up 3% CER 0.1% +0.8% +1.1% SG&A up 6% CER 0.7% SG&A up 4% CER 0.1% CER CER R&D down
Slide 6: Improved cash generation
Improved cash generation Clearer prioritisation and tighter control £m H1 17 free cash flow 386 Higher net operating cash (incl. negative currency)* 261 Lower net Capex 195 Lower restructuring payments 119 Lower distributions to minorities 165 Higher CCL (incl. £317m milestone) 399 Other** 94 H1 18
Slide 7: Continued cost and cash discipline to fund future growth
Continued cost and cash discipline to fund future growth Funding investments in accelerating the pipeline and new launches Delivering growth Improved operating leverage Investing in our business Driving new launches Major Restructuring Accelerating the pipeline Simpler site network Digital, data and
Slide 8: New Major Restructuring to fund future growth
New Major Restructuring to fund future growth Estimated annual savings at 2017 FX Major Restructuring costs at 2017 FX £bn 0.40 2018 2019 2020 2021 0.35 Cash 0.3 0.4 0.1 - Non-Cash 0.1 0.5 0.2 0.1 0.25 Total 0.4 0.9 0.3 0.1 Total costs £1.7bn Estimated annual savings Cash £0.8bn Non-cash £0.9bn ~£0.
Slide 9: Upgraded 2018 guidance
Upgraded 2018 guidance Original guidance Upgraded guidance Adjusted EPS growth Shingrix upgrade Adjusted EPS growth + 4 to 7% CER + 7 to 10% CER with no Advair Gx Novartis buy-out with no Advair Gx Adjusted EPS growth Advair -30% Adjusted EPS growth -3% to flat CER + 4 to 7% CER with Advair Gx mid-y
Slide 10: Confident in delivery of 2020 outlook
Confident in delivery of 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. The CAGRs are 5 years to 2020. 10
Slide 11: Q&A
do more feel better live longer Q&A