Gsk Plc · LSE:GSK

Gsk — GlaxoSmithKline — Investor Presentation (December 2011)

15 slides from Gsk's investor presentation, Dec 1, 2011

  1. Slide 1: GlaxoSmithKline Core Reporting

    GlaxoSmithKline Core Reporting 1st December 2011

  2. Slide 2: Today's agenda

    Today’s agenda ƒ Recap on Financial Architecture and objectives of transition to core ƒ Core calculation ƒ Other reclassifications ƒ Summary and transition plans ƒ Q&A Note: ƒ Historical calculations available on our website – For 2011: Nine months YTD 2011 plus Q1, Q2 and Q3 – For 2010: Full year,

  3. Slide 3: GSK Financial Architecture: Driving Returns

    GSK Financial Architecture: Driving Returns Sales growth Operating EPS leverage Focus Focus Returns to on on shareholders returns returns Financial Free Cash Flow efficiency Cash flow growth 3

  4. Slide 4: Measurement and Reporting aligned to Financial Architecture

    Measurement and Reporting aligned to Financial Architecture ƒ Simplified turnover disclosure – Regional Sales growth – Business EPS ƒ Core EPS Operating leverage Focus ƒ Greater visibility on R&D spend on ƒ Focus on core operating profit and margin returns Free Cash ƒ Free Cash Flow ƒ End of middle

  5. Slide 5: Summary

    Summary ƒ Objectives of transitioning to ‘core earnings’ measure – Greater transparency – Improve quality of financial reporting – Provide greater clarity as to ongoing trading performance – Improve comparability with peer companies – Provide more direct comparison to underlying cash earnings ƒ Item

  6. Slide 6: Exclusions from core earnings

    Exclusions from core earnings Summary of Adjustments Amortisation and Non-cash charges: impairment of intangibles - Excluding these provides better measure of underlying cash generation. Major restructuring Charges can have a significant distorting impact Legal costs Charges can have a significant d

  7. Slide 7: Amortisation and Impairment of Intangible Assets including Goodwill

    Amortisation and Impairment of Intangible Assets including Goodwill ƒ Costs excluded from core earnings – Amortisation and charges related to impairment of non-computer software intangibles including goodwill – These charges are non-cash items ƒ Costs included in core earnings – Amortisation and cha

  8. Slide 8: Restructuring

    Restructuring ƒ Costs excluded from core earnings – Only charges related to major restructuring programmes that are part of a separate announcement – Current £4.5 billion restructuring programme charges (~£0.7bn remaining post Q3 2011) – Costs incurred solely as a direct result of any restructuring

  9. Slide 9: Legal costs

    Legal costs ƒ Costs excluded from core earnings – All net legal charges and expenses related to the settlement of product liability, litigation, anti-trust and government investigation matters ƒ Costs included in core earnings – Legal functions costs – Intellectual property protection costs 9

  10. Slide 10: Other Operating Income, Disposal of associates, Products and Businesses

    Other Operating Income, Disposal of associates, Products and Businesses ƒ Items to be excluded from core earnings – Profits and losses from the disposal of associates, businesses, products and investments – Quoted and non-quoted equity investments impairment charges – Fair value adjustments on finan

  11. Slide 11: Business Combination Accounting Adjustments for Material Acquisitions

    Business Combination Accounting Adjustments for Material Acquisitions ƒ Adjustments arising on material business acquisitions (e.g. Stiefel and Reliant) ƒ Items to be excluded from core earnings – Fair value gains on existing holdings – Fair value adjustments to contingent considerations – Inventory

  12. Slide 12: Other Reclassifications

    Other Reclassifications Commencing Q1 2012 ƒ Will further align our external reporting with our management reporting / structure ƒ Restatements expected: – EMAP excluding Australia and New Zealand to be reported in place of EM alone – Products for Rare Diseases (e.g., Flolan and Volibris) will be re

  13. Slide 13: Impact of transition to historical core earnings

    Impact of transition to historical core earnings Pence per share 9mths Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 YTD 11 IFRS EPS 26.4 (6.0) 25.3 (13.6) 32.1 30.0 21.8 27.6 79.4 Income / (loss) Adjustments to calculate core: Amortisation and impairments of 1.8 1.4 1.8 2.6 7.6 1.6 1.9 1.8 5.3 int

  14. Slide 14: Transition to core earnings

    Transition to core earnings ƒ No changes to financial reporting for 2011 – 2011 year end press release will focus on ‘Results before major restructuring’ ƒ Core earnings will be the focus of our financial reporting beginning Q1 2012 – For each period, we will provide a detailed reconciliation of GSK

  15. Slide 15: Q&A

    e cs Q&A

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