Gsk Plc · LSE:GSK
Gsk — Q3 2019 Earnings Presentation
28 slides from Gsk's earnings presentation, Oct 30, 2019
Slide 1: Q3 2019 Results
Q3 2019 Results 30 October 2019
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 2019 progress Emma Walmsley, Chief Executive Officer Q3 2019 financial results Iain Mackay, Chief Financial Officer Pharma & Vaccines update Luke Miels, President, Global Pharmaceuticals David Redfern, Chief Strategy Officer, Chairman of ViiV Healthcare Summary Emma Walmsley, Chief Executi
Slide 4: Q3 2019 progress
Q3 2019 progress Emma Walmsley, CEO
Slide 5: Sales growth across all three businesses
Sales growth across all three businesses Pharmaceuticals Respiratory +19%* Group sales growth of +3% CER HIV +0%, dolutegravir +2%, 2DRs £119m +11% (pro forma +6%) Benlysta +35% Zejula £64m 2pp decrease in Group Adjusted operating margin as we Vaccines Shingrix £535m, +76% invest in innovation +15%
Slide 6: Q3 progress made on our priorities
Q3 progress made on our 3 priorities ✔ Continued strong performance with new product launches 2019 focus ✔ Positive result in DREAMM-2 study for belantamab mafadotin in 4L MM; regulatory submissions on track ✔ Positive data from PRIMA study for Zejula, and ICOS agonist Innovation GSK’609 presented a
Slide 7: Q3 2019 financial results
Q3 2019 financial results Iain Mackay, CFO
Slide 8: Headline results
Headline results Q3 2019 Reported growth % 9M 2019 Reported growth % £m AER CER £m AER CER Turnover* 9,385 16 11 24,855 10 7 Total operating profit 2,147 12 3 5,059 29 20 Total EPS 31.4p 9 (1) 67.7p 38 28 Adjusted operating profit* 2,786 10 3 7,120 9 3 Adjusted EPS 38.6p 9 1 99.2p 12 7 Free cash flo
Slide 9: Results reconciliation
Results reconciliation Q3 2019 Disposals, Total Intangible Intangible Major Transaction significant Adjusted results amortisation impairment restructuring related legal and other results Turnover 9.4 9.4 (£bn) Operating 2.1 0.2 <0.1 0.2 0.5 (0.3) 2.8 profit (£bn) EPS 31.4 3.4 0.4 3.4 5.7 (5.7) 38.6
Slide 10: Pharmaceuticals
Pharmaceuticals Q3 2019 Sales Operating margin Sales All figures £m +3% CER -850bps CER New launches: Trelegy, Nucala, Juluca, +7% AER -810bps AER Dovato 4,531 32.2% Ventolin AG 4,221 Continued strong Benylsta performance 645 806 24.1% Impact of generic Advair 1,209 1,267 1,361 1,093 Operating profi
Slide 11: Vaccines
Vaccines Q3 2019 Sales Operating margin Sales All figures £m +15% CER +570bps CER +20% AER +740bps AER Shingrix demand 2,308 Phasing of Flu 50.3% 371 Meningitis growth 1,924 304 MMRV supply constraints 535 43.0% 286 329 371 1,162 827 Operating profit 1,005 1,031 Operating leverage including seasonal
Slide 12: Consumer Healthcare
Consumer Healthcare Q3 2019 Sales Operating margin Sales All figures £m +3% CER Close of JV on 31 July +120bps CER 2,526 Power brands performance 2,371 24.3% Strong growth in International 730 22.4% 1,947 690 Divestments & phasing out of contract manufacturing c.1% 22.0% 452 658 643 599 613 532 429
Slide 13: Sales and Adjusted operating margins
Sales and Adjusted operating margins Q3 2019 Sales Adjusted operating margin All figures £m Q3 2018 sales at '18 rates 8,092 Q3 2018 operating margin 31.2% Pro Forma sales at '18 rates 437 Pro forma impact on margin 0.4% 2018 sales at '18 rates (PF) 8,529 Q3 2018 Proforma margin 30.8% Pharma up 3% C
Slide 14: Adjusted operating profit to net income
Adjusted operating profit to net income Continued delivery of financial efficiency Q3 18 Q3 19 £m £m Operating profit 2,524 2,786 Net finance expense 221 206 Share of associates 15 17 Tax 430 411 Tax rate 18.6% 15.8% Non-controlling interests 141 275 Net income 1,747 1,911 14
Slide 15: 9M 2019 free cash flow of £2.5bn
9M 2019 free cash flow of £2.5bn £m Key Drivers 9M 2018 free cash flow 2,375 Lower CCL 255 Comparison to Novartis milestone in 2018 Higher net operating cash** 76 Improved operating cashflow / working capital and benefit from FX offset by RAR Higher net Capex* 298 Including upfront to Merck KGaA of
Slide 16: 2019 guidance
2019 guidance Previous guidance Upgraded guidance Operational performance Adjusted EPS Interest expense Adjusted EPS Down 3 to 5% CER Around flat CER Effective tax rate All expectations and targets regarding future performance should be read together with the “Outlook assumptions and cautionary stat
Slide 17: Pharma and Vaccines update
Pharma and Vaccines update Luke Miels, President, Global Pharmaceuticals David Redfern, Chief Strategy Officer, Chairman of ViiV Healthcare
Slide 18: Respiratory: new products continue to deliver strong sales
Respiratory: new products continue to deliver strong sales Trelegy: steady volume growth Nucala: market leader despite competition Total TRx Volume (US) SEA Biologic Market Share (US Sales) 40k 40% Nucala 35k Competitor X 30% 30k Competitor Y 25k 20% Competitor z 20k 10% 15k 10k 0% Strong uptake of
Slide 19: Zejula leads PARP class in share of 2nd line maintenance ovarian cancer
Zejula leads PARP class in share of 2nd line maintenance ovarian cancer; data supports opportunity to expand PARPi patient share; 2L+ maintenance setting Data supports expanding market opportunity 80% PRIMA data at ESMO 2019 showed clear benefit of Zejula Niraparib Competitor X Competitor Y for pati
Slide 20: Benlysta: delivering growth with expansion potential
Benlysta: delivering growth with expansion potential Steady double digit growth Expansion opportunities Quarterly Sales Progression 35% CER growth driven by demand in Q3 180 • Steady adoption of subcutaneous formulation 160 • Improved patient adherence through new 140 programme execution 120 • Paedi
Slide 21: Vaccines: strong performance for Shingrix and Bexsero
Vaccines: strong performance for Shingrix and Bexsero Strong Shingrix execution; capacity Bexsero continued growth driven by expansion continues global demand and share gains in the US 20m Bexsero global sales £m 15m 600 10m 500 5m 400 m 300 200 100 Cumulative TRx 0 Estimate of retail and non-retail
Slide 22: HIV: momentum building in transition to drug regimens
HIV: momentum building in transition to 2 drug regimens DTG growing driven by 2DRs Data flow to support new portfolio All figures £m Dovato ✔ July 2019 EU FDC approval Q318 DTG sales 1,138 ✔ July 2019 GEMINI I & II 96-week study readout ✔ July 2019 at ’18 rates TANGO switch study readout Triumeq 47
Slide 23: Focus on delivering business priorities
Focus on delivering business priorities 2019 focus New global Innovation Pharmaceuticals and • Strengthen pipeline • Execution of launches Vaccines company with R&D focused on science of the immune system, human genetics and – Progress advanced technologies pipeline Performance • Driving growth and
Slide 24: Appendix
Appendix
Slide 25: 2019 outlook
2019 outlook Adjusted EPS/Dividend Operating costs Other Adjusted EPS guidance: SG&A and R&D Royalties Around flat at CER Addition of Tesaro cost base Around £350m Dividend R&D spend to pick up significantly Net finance expense Expect 80p for 2019 Increased targeted promotion in Between £850-900m pr
Slide 26: Our R&D pipeline
Innovation Our R&D pipeline 41 medicines and 17 vaccines Phase 1 Phase 1 Expansion/Phase 2 Pivotal/Registration Vaccines 3358699* (targeted BET inhibitor) RA^ 3640254 (maturation inhibitor) HIV Benlysta + Rituxan SLE** Shingrix immuno-compromised* – Phase 3† 3858279* (CCL17 antagonist) OA pain 32288
Slide 27: Upcoming milestones that will inform our progress
Innovation Upcoming milestones that will inform our progress 1H 2019 2H 2019 1H 2020 2H 2020 1H 2021 Anticipated cabotegravir LA + rilpivirine LA HIV treatment fostemsavir (attachment inhibitor) HIV mepolizumab HES mepolizumab NP Benlysta + Rituxan SLE submission Zejula 4L ovarian cancer sNDA (QUA
Slide 28: Changes in portfolio since Q2 2019
Innovation Changes in portfolio since Q2 2019 Changes to pipeline New to Phase I New to Phase II New to Pivotal New to Registration C. Difficile, vaccine GSK2831781 (LAG3) ulcerative colitis Gepotidacin (GSK2140944) antibacterial SAM (rabies model), vaccine Removed from Phase I Removed from Phase II