Gsk Plc · LSE:GSK
Gsk — GlaxoSmithKline — FY2003 Earnings Presentation
39 slides from Gsk's earnings presentation, Feb 12, 2004
Slide 1: Full Year Results 2003 Presentation to Investors/Analysts
Full Year Results 2003 Presentation to Investors/Analysts 12th February 2004
Slide 2: JP Garnier, Chief Executive Officer
JP Garnier Chief Executive Officer
Slide 3: John Coombe, Chief Financial Officer
John Coombe Chief Financial Officer
Slide 4: Overview of Business Performance in 2003
Overview of Business Performance in 2003 2003 % change Business Performance £m CER £ Sales 21,441 5 1 - Pharma 18,181 5 1 - Consumer 3,260 4 1 EPS 82.1p 10 5 The full UK GAAP results are available on the GSK website; gsk.com
Slide 5: US Dollar Trends
US Dollar Trends 1.90 Jan 31st = $1.82 1.85 1.80 1.75 1.70 1.65 £/$ 1.60 1.55 1.50 2002 1.45 2003 1.40 2004 1.35 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month end closing rates
Slide 6: Exchange Rate Impact: Full Year 2004
Exchange Rate Impact: Full Year 2004 £/$ Movement EPS Impact • 5 Cent +/- 2% • 10 Cent +/- 4% £/Euro Movement EPS Impact • 5 Cent +/- 1% • 10 Cent +/- 2% If Exchange Rates hold as at 31/01/04 ($1.82/ €1.47): Expect 7% impact to 2004 EPS
Slide 7: Q403 Business Performance P&L
Q403 Business Performance P&L 4Q03 4Q02 % Change £m £m CER £ Sales 5,378 5,668 (1) (5) Trading Profit 1,470 1,705 (8) (14) Other operating (167) 23 income/(expense) Net interest (43) (36) Profit Before Tax 1,283 1,709 (20) (25) Tax Rate 27.5% 27.0% Earnings Per Share 15.7p 20.7p (19) (24)
Slide 8: Cost of Goods Analysis
Cost of Goods Analysis Q403 Product/Regional Mix - 0.4% Currency - 0.5% Restructuring Costs - 0.2% Stock Write Offs/Other - 0.7% Total Difference vs Q402 as a % of Sales: -1.8%
Slide 9: FY03 2003 Business Performance P&L
FY03 2003 Business Performance P&L 2003 2002 % Change £m £m CER £ Sales 21,441 21,212 5 1 Cost of Goods (4,188) (4,243) 0 (1) 19.5% 20.0% SG&A (7,563) (7,543) 4 0 35.3% 35.5% R&D (2,770) (2,732) 4 1 12.9% 12.9% Trading Profit 6,920 6,694 9 3 32.3% 31.6% Earnings per Share 82.1p 78.3p 10 5 % In Itali
Slide 10: Cash Flow
Cash Flow 2003 2002 £m £m Net Operating Cash Flow 7,005 7,255 Taxation (1,917) (1,633) Capital Expenditure (869) (1,044) Dividends (2,333) (2,327) Purchase of Own Shares (980) (2,220) Other (219) (265) Decrease/(Increase) in Net Debt 687 (234) 31st Dec 03 31st Dec 02 Net Debt (1,648) (2,335)
Slide 11: EPS Guidance 2003 - 2005
EPS Guidance 2003 - 2005 2003 High single digit or better percentage growth 2004 At least in line with 2003* 2005 Return to growth *Business performance
Slide 12: David Stout, President, Pharmaceuticals
David Stout President, Pharmaceuticals
Slide 13: Pharmaceutical Industry Environment
Pharmaceutical Industry Environment • Medicare Reform • Canadian reimportation • FDA • European government reforms • Article 31f
Slide 14: Pharmaceuticals - Sales by Region
Pharmaceuticals - Sales by Region £3.7bn (+8%) % share USA 52 £9.4bn Europe 28 (+5%) £5.1bn International 20 (+2%) Total Pharma Sales £18.2bn +5% Note: CER % growth - twelve months ended 31st December 2003
Slide 15: Paxil: Generic Erosion
Paxil: Generic Erosion US % TRx Share of Total branded and generic Paxil 100% 21% 46% 48% 50% 52% 80% Apotex Par 60% Generics Paxil IR 67% 45% 19% 16% 13% 11% 40% Paxil CR 20% 33% 34% 35% 36% 37% 37% 0% Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04* Source: Verispan SPA - US Antidepressant market monthl
Slide 16: Q403 US Performance
Q403 US Performance US Product Reported Est. Underlying Growth Growth Avandia/Avandamet +12% +23% Lamictal +28% +43% Trizivir -2% +11% Wellbutrin +1% +19%
Slide 17: 2003 Key Product Performances
2003 Key Product Performances Respiratory Seretide £2.2bn +39% Diabetes Avandia £931m +24% CNS Wellbutrin £953m +18% Lamictal £556m +31% Oncology Zofran £774m +16% Vaccines Infanrix/ £336m +32% Pediarix HIV/Herpes Trizivir £376m +22% Valtrex £499m +23% CV Coreg £361m +28% Reported 2003 Global Sales
Slide 18: Seretide/Advair: Very Strong Growth Continues
Very Strong Growth Continues 650 Global Sales and Growth of Seretide/Advair +39% 600 +40% Sales (£m) 550 +31% +48% 500 +50% 450 400 Q402 Q103 Q203 Q303 Q403 Source: GSK Reported Sales and Growth (CER)
Slide 19: US COPD Opportunity
US COPD Opportunity 9.5m 4.5m Diagnosed 26% Not Diagnosed and treated use Advair 6.0m Diagnosed but not treated US COPD Population: 20m Patients Source: GSK Market Estimates
Slide 20: Strong Global Performances: Avandia
Strong Global Performances US OAD Monthly TRx Market Share • USA 11.0% – Sales £755m +20% Avandia/Avandamet – 200,000 TRx per week 10.5% 10.0% • Europe – Sales £70m +57% 9.5% – Avandamet approved Actos Q403 9.0% • International 8.5% – Sales £106m +40% Dec-02 Apr-03 Aug-03 Dec-03 Sources: GSK Reporte
Slide 21: A New Opportunity H204
A New Opportunity H204 + % Patients reaching ADA Goal • The Opportunity: (<7% HbA1c)2 – US OAD mkt worth £3.3bn1 60% 56% – SU’s = 35% of OAD mkt 50% – 45% OAD market is combination therapy >50% of these patients use 40% an SU and 18% use an SU+ TZD 30% 22% • The Product Potential: 20% – Convenient,
Slide 22: Emerging Blockbusters
Emerging Blockbusters! 3 Products combined global sales +27% and growth 2002 vs 2003 2003... 1,400 • Contributed sales >£1.4bn • 5 FDA approvals for new 1,300 indications Sales (£m) • Strong US NRx growth1 1,200 – Lamictal +40% – Valtrex +23% 1,100 – Coreg +26% 1,000 2002 2003 Sources: GSK Reported
Slide 23: Strong Conversion Continues...
Strong Conversion Continues... 45% 40% 40% 35% Percentage of NRx converted 30% 25% 20% 15% 10% 5% 0% 12-Sep 26-Sep 10-Oct 24-Oct 7-Nov 21-Nov 5-Dec 19-Dec 2-Jan 16-Jan 30-Jan Source: Verispan antidepressant weekly NRx data
Slide 24: Growth from all areas of AD Market
Growth from all areas of AD Market Switches to Wellbutrin XL1 • >70% of physicians believed their patients are SNRIs/ more satisfied with Other Wellbutrin XL compared to 11% previous brand used1 SSRIs Wellbutrin SR 36% • Top 20 managed care 53% plans: 75% have Wellbutrin XL at tier 2 1. GSK Market R
Slide 25: Continued Volume Growth...
Continued Volume Growth... TRx (000s) TRx (000s) Week prior to Latest Week Difference Cialis Launch (30/01/04) Viagra 296 279 -6% Levitra 30 33 +10% Cialis 0 19 n/a US ED Market TRx +11% Dec 03 Source: Verispan ED weekly TRx data (000s)
Slide 26: New HIV Treatment Expected Q304
New HIV Treatment Expected Q304 • First, once daily, dual therapy in a single tablet • Significant improvement in patient convenience • Studied in nearly 5000 patients • Safe and efficacious in combination with NNRTIs, NRTIs and PIs
Slide 27: Solifenacin succinate
Solifenacin succinate US OAB Market • Solifenacin succinate: $1bn +16%1 – significantly improved all OAB symptoms 17m sufferers2 – 5mg once-daily dose: Only 20% treated3 Low (11%) incidence of dry mouth – Launch end ‘04 1. IMS Sales MAT Sept 2003 2. American Foundation for Urologic Disease 3. Data M
Slide 28: Pharmaceuticals Business summary
Pharmaceuticals Business • Strong global performances of Advair & Avandia • Continued good growth from other key portfolio products • Increased market share and sales of lifecycle products • Excellent US launches of Wellbutrin XL and Levitra
Slide 29: JP Garnier, Chief Executive Officer
JP Garnier Chief Executive Officer
Slide 30: Q403 Analysis
Q403 Analysis EPS Growth (CER ) • Reported EPS -19% * Net change £294m (£401m Q403 vs £107m Q402)
Slide 31: Q403 Analysis
Q403 Analysis EPS Growth (CER ) • Reported EPS -19% • Excluding legal & charges* -1% * Net change £294m (£401m Q403 vs £107m Q402)
Slide 32: Q403 Analysis
Q403 Analysis EPS Growth (CER ) • Reported EPS -19% • Excluding legal & charges* -1% • Excluding legal & charges & Paxil +11% generics * Net change £294m (£401m Q403 vs £107m Q402)
Slide 33: Impact on EPS following US generic competition
Impact on EPS following US generic competition US Pharma sales ($bn) impacted by % Decline in EPS reported in the year following US generic competiton1 generic competition2 WW pharma sales impacted ($bn) 3.0 2.5 GSK Paxil IR 2.0 Wellbn SR 1.5 1.0 0.5 0.0 % Decline in EPS growth -5% -10% -15% -20% -2
Slide 34: Impact on EPS following US generic competition
Impact on EPS following US generic competition US Pharma sales ($bn) impacted by % Decline in EPS reported in the year following US generic competiton1 generic competition2 WW pharma sales impacted ($bn) 3.0 AZN 2.5 GSK Losec Paxil IR 2.0 Wellbn SR LLY BMS Prozac Gluco 1.5 IR 1.0 0.5 0.0 % Decline i
Slide 35: GSK - Outlook
GSK - Outlook Q403 Strong sales growth from Yes existing portfolio Low Generic Risk No Large Phase III Pipeline No EPS growth No
Slide 36: Global drug sector patent expiries (2005E-2007E)
Global drug sector patent expiries (2005E-2007E) 35% 2004E Sales at risk from patent expiry (2005E-2007E) 30% 25% 20% 15% 10% 5% 0% Co . zer S BM vent is che labo rtis rin g ca line ough Lil ly eth keda ch i & Pfi A R o e ova che Z ene hK l Eli Wy Ta nou rck nth t Me y N S s tra Smi ing-P ama fi-S A
Slide 37: Key NCEs: Expected to be in Phase III by end 2004
Key NCEs: Expected to be in Phase III by end 2004 Nelarabine Meningitis vaccine Beyond Advair Rotarix NK1 Oral VLA4 Streptorix Glycine antagonist DDPIV Simplirix KSP inhibitor PPAR pan Solifenacin LpPLA2 CCR5 Boniva CCK-A Elacridar Alvimopan CCR3 antagonist Odiparcil Dual Kinase HIV PI PPAR α 162 HI
Slide 38: GSK - Outlook
GSK - Outlook Q403 Q404 Strong sales growth from Yes Yes existing portfolio Low Generic Risk No Yes Large Phase III Pipeline No Yes EPS growth No Yes
Slide 39: GlaxoSmithKline
osk GlaxoSmithKline