Gsk Plc · LSE:GSK
Gsk — FY2015 Earnings Presentation
32 slides from Gsk's earnings presentation, Feb 3, 2016
Slide 1: 2015 full year results
2015 full year results 3 February 2016
Slide 2: Sir Andrew Witty, CEO
Sir Andrew Witty CEO 2015 full year results 3 February 2016
Slide 3: Significant progress made in 2015
Significant progress made in 2015 3 growth New product* Pipeline businesses contribution progressed £682m £591m Cx £446m £269m Rx Vx Q1 Q2 Q3 Q4 *New products defined as: Rx: Breo, Anoro, Incruse, Arnuity, Tanzeum, Nucala, Tivicay, Triumeq. Vx: Menveo, Bexsero, Shingrix (not yet launched) 3
Slide 4: Increasing contribution from new products
Increasing contribution from new products New Pharma products* now make up 16.5% Now expect £6bn from 11 new products** of overall pharmaceutical sales up to 2 years earlier (2018 v 2020) £1,988m 16.5% 14.0% £624m £27m 2013 2014 2015 Q3 Q4 *New Pharma products defined as: Breo, Anoro, Incruse, Arnui
Slide 5: New commercial model directly supporting growth
New commercial model directly supporting growth Fundamental changes giving us competitive advantage Sales force & HCPs Digital Customer • Global incentive sales force capabilities engagement compensation changes fully • 1.8 million unique visitors • #1 in customer trust* rolled out to GSK HCP portal
Slide 6: Significant momentum in the respiratory portfolio: Breo
Significant momentum in the respiratory portfolio Breo upward trajectory in US market share Breo ICS/LABA US market growth US ICS/LABA market share of ~6% in 2015 8% Breo NRx share 7% Breo TRx share 6% Breo TRx volume now >35k weekly, 5% supported by: 4% • Asthma indication launched 3% mid 2015 2% •
Slide 7: Significant momentum in the respiratory portfolio: Anoro and Incruse
Significant momentum in the respiratory portfolio Anoro and Incruse supporting growth Anoro + Incruse LAMA containing US market 35% US LAMA containing market share Anoro + growth of 4.5% in 2015 Incruse 30% NBRx 25% Anoro + Incruse TRx volume now 20% Anoro + >19k weekly, supported by: Incruse 15% NR
Slide 8: Significant momentum in the respiratory portfolio: Nucala
Significant momentum in the respiratory portfolio Nucala provides opportunity for future growth Nucala First in class treatment for severe eosinophilic asthma - 53% reduction in exacerbations - Significant reduction in daily oral corticosteroid dose while maintaining control seen in trials - Dosing
Slide 9: HIV growth acceleration, with pipeline bolstered by BMS transactions
HIV growth acceleration, with pipeline to be further bolstered by BMS transactions US weekly TRx share since Tivicay launch 30% vs competitors (STR+3rd agent) HIV US market growth of 20% in 2015 25% 20% DTG TRx volume >19k weekly with nearly 1 in 6 patients on a DTG regimen DTG total 15% The DTG por
Slide 10: Broad Vaccines portfolio driving growth
Broad Vaccines portfolio driving growth, realising benefits from integration and ongoing investments Bexsero & Menveo Shingrix 90-97% efficacy against global sales +43%* shingles in two Phase III studies Proactive supply network upgrades 100 enabled accelerated 90 delivery schedule of Flu vaccines i
Slide 11: Consumer business on track to deliver 2020 targets
Consumer business on track to deliver 2020 targets 6% net sales growth CER* • Innovation** ~14% of net sales • Supported by share gains in key categories Integration synergies on track • Over 7,000 appointments • 54 site consolidations • Completion of required divestments 180 bps margin improvement
Slide 12: Focused brand strategy and innovation fuelling growth
Focused brand strategy and innovation fuelling growth Wellness Oral health Nutrition Skin health £3.0bn £1.9bn £0.7bn £0.5bn Consumption MAT growth: +13% +39% + >100% +16% +10% +10% +9% Gel delivered share Driven by innovation No. 1 doctor Double digit Double digit Nutrition loved by New branding an
Slide 13: Pipeline delivery: Focused on long term sustainable innovation
Pipeline delivery: Focused on long term sustainable innovation Respiratory Accelerate Discovery output HIV/ Infectious Diseases Focus where science is innovative Immuno- 13 % Inflammation Oncology IRR* Balance of internal vs external Rare Diseases Vaccines Reduce fixed cost to drive ROI *Detailed IR
Slide 14: Pipeline delivery: 2016/17 key pipeline milestones
Pipeline delivery: 2016/17 key pipeline milestones Expect ~40 4 regulatory decisions in 2016/2017 assets at R&D Up to event 10 significant filings expected in 2016/2017 Up to 80% 10 Ph III programme starts in 2016/2017 have potential to Up to be first in class 20 Ph II programme starts in 2016/2017
Slide 15: GSK is well positioned to deliver growth in 2016
GSK is well positioned to deliver growth in 2016 2016 core EPS expected to reach double digit growth CER 3 growth businesses Balanced geographies Cx US 26% Int • Drive new product momentum 34% 39% • Leverage new commercial model Rx Vx • Deliver the pipeline 59% 15% EU 27% 15
Slide 16: 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 17: Simon Dingemans, CFO
Simon Dingemans CFO 2015 full year results 3 February 2016
Slide 18: Headline results
Headline results Ahead of financial guidance after year of transformation 2015 Reported growth % Pro-forma growth % £m £m CER £ CER Turnover 23,923 6 4 1 Core operating profit 5,729 (9) (13) (3) Core EPS 75.7p (15) (21) n/a Total operating profit 10,322 100+ 100+ Total EPS 174.3p 100+ 100+ Ordinary
Slide 19: Results reconciliation
Results reconciliation 2015 FY results Intangible amortisation Total and Major Acquisition Core Results impairment restructuring Legal related Disposals Results Turnover (£bn) 23.9 23.9 Operating profit (£bn) 10.3 0.8 1.9 0.2 2.2 (9.7) 5.7 EPS (pence) 174.3 11.5 30.1 4.1 28.8 (173.1) 75.7 19
Slide 20: Sales growth +6% reported, +1% pro-forma
Sales growth +6% reported, +1% pro-forma Growth from new Rx products and Vx & Cx offsetting Seretide/Advair decline Reported results Pro-forma results 2014 Reported sales £23.0bn 2014 pro-forma sales £24.0bn Pharma £1.1bn -7% Pharma £0.1bn -1% Vaccines £0.6bn +19% Vaccines £0.1bn +3% Consumer £1.9bn
Slide 21: Core operating profit
Core operating profit Pro-forma operating profit -3% CER, after investments in new products 2015 Core P&L 2015 vs 2014 2015 vs 2014 £m % of sales CER reported growth CER pro-forma growth Sales 23,923 100.0 6% 1% COGS (7,520) (31.4) 18% 5% SG&A (7,907) (33.1) 12% 4% +1% SG&A excl. R&D (3,096) (12.9)
Slide 22: Delivery of integration and restructuring benefits
Delivery of integration and restructuring benefits Accelerating delivery: £2.4bn by 2016 and full £3bn by 2017 £bn* 2015 incremental £1.0bn annual savings Prior estimate (May 2015) Latest estimate Cx £0.1bn COGS £0.2bn Total costs of £5bn Vx £0.2bn • ~£3.65bn cash • ~£1.35bn non cash SG&A £0.5bn 2.9
Slide 23: Financial Efficiency
Financial Efficiency Sustained contribution from financial architecture 2014 2015 2016 outlook Core £m £m Operating profit 6,594 5,729 Net finance expense (646) (636) Modest increase, reflecting higher debt Share of associates 30 (2) Tax (1,172) (993) 20% to 21% Tax rate 19.6% 19.5% Minorities (222)
Slide 24: Financial Strategy
Financial Strategy Retained proceeds to accelerate restructuring and maintain dividend during transformation £m Reduction of £3.7bn Cash Restructuring Spend (£bn) 1.3 1.1 268 237 6,693 14,377 0.5 3,874 10,727 2015 2016 2017 2,467 expected expected 1,131 Cumulative total £bn 1.7 3.0 3.5 Net debt Net
Slide 25: Transformation on track to return GSK to growth
Transformation on track to return GSK to growth 2015 key achievements 2016 outlook Completed Novartis transaction Continued progress in integration Integration on track Completion of Rx restructuring Rx restructuring well advanced Focus on execution for new products: New product perfor
Slide 26: Appendix
Appendix
Slide 27: 12 Month Pro-Forma 2015
12 Month* Pro-Forma 2015 £bn at 2015 actual rates 2015 Core Results 2015 12 Month Pro-Forma Operating Operating Operating Operating Turnover Turnover Profit Margin Profit Margin Total Pharma 14.2 4.3 30.0% 14.0 4.2 29.7% Vaccines 3.7 1.0 26.4% 3.7 0.9 24.6% Consumer 6.0 0.7 11.3% 6.3 0.7 11.1% Corpo
Slide 28: Currency
Currency 2015 currency sales exposure 2016 core EPS ready reckoner US $ 34 % US $ Euro € 19 % 10 cents movement in average exchange rate for full year impacts EPS by approx. +/- 3.5% Japanese ¥ 6% Other* 41 % Euro € 10 cents movement in average exchange rate for full year * The other currencies that
Slide 29: 2015 currency impact on turnover growth
2015 currency impact on turnover growth Impact on sales 2.5% 2.1% Russia (0.5%) 0.4% Brazil (0.4%) 1.9% Canada (0.2%) 5.9% Australia (0.2%) 4.0% China 0.2% Reported USD Euro JPY Other Reported 2015 sales India 0.1% sales growth growth (AR) RoW (0.9%) (CER) Total “other” (1.9%) 29
Slide 30: 2015 currency impact on core operating profit
2015 currency impact on core operating profit Core 2015 Core 2015 Impact on core operating profit OP OP growth growth (CER) USD Euro JPY Other (AR) Russia (0.9%) Brazil (0.6%) Canada (0.4%) Australia (0.5%) 4.7% 4.6% China 0.3% (9.0%) 0.9% India 0.1% 3.3% RoW (1.3%) (13.1%) Total “other” (3.3%) 30
Slide 31: Methodology to estimate the IRR of GSK R&D's late stage pipeline
Methodology to estimate the IRR of GSK R&D’s late stage pipeline Estimated Sales R&D Costs • R&D costs associated with the development of our current late-stage pipeline projects are • Late stage pipeline includes pharma NCEs, additional indications for these, included (including the costs of failed
Slide 32: 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