Slide 1: 2016 full year results
Sir Andrew Witty CEO 2016 full year results 8 February 2017
Slide 2: Significant progress made in 2016
Significant progress made in 2016 Core EPS +12% (CER), at top end of upgraded guidance for 2016† 3 growth businesses New product contribution Pipeline progress Annual sales from 11 new products* Filed 4 assets for regulatory approval +9% CER (+5% pro- Closed triple Shingrix forma) £4,453m ≥£6bn sale
Slide 3: Portfolio of once-a-day, easy-to-use Ellipta inhalers
Portfolio of once-a-day, easy-to-use Ellipta inhalers Strong commercial performance; closed triple filed 25% Breo US ICS/LABA market NBRx Closed triple: 20% NRx • Filed in US and EU for COPD in Q4 2016 15% 10% TRx 10 month review expected in US 5% • FULFIL data demonstrated superiority vs Symbicor
Slide 4: Nucala launch off to a strong start
Nucala launch off to a strong start Additional data and indications expected to drive further growth Nucala US Cumulative Sales (£M) £70 Pipeline update: £60 • COSMOS study† on positive long term safety and £50 efficacy of Nucala presented at AAAAI 2016 £40 NUCALA • JACI publication˄ showing hospita
Slide 5: HIV growth acceleration and pipeline progress
HIV growth acceleration and pipeline progress US weekly TRx share since Tivicay launch DTG continues to be the #1 core agent in the vs competitors (STR + core agent) US TRx market with >25,000 weekly scripts 30% DTG is the #1 core agent in the top 5 European markets 25% DTG total 23% DTG has 39% cor
Slide 6: Broad Vaccines portfolio driving growth
Broad Vaccines portfolio driving growth Strong 2016 performance across Filed Shingrix in US, Europe and Canada all regions* Expect Japan filing H1 2017 International US +12% +8% £1,599m Accelerated global sales of £1,570m meningitis portfolio** Europe £592m +16% £1,423m £275m Strong progress on US s
Slide 7: Focused strategy and fast integration driving growth in Consumer Healthcare
Focused strategy and fast integration driving top and bottom line growth in Consumer Healthcare 2016 net sales +5% (pro-forma) • Balanced growth across all three regions Sensodyne • Power brands up double-digit year-on-year hits £1 billion • Gaining share in 2/3 of power brand / priority market unit
Slide 8: Significant progress made in 2016
Significant progress made in 2016 Core EPS +12% (CER), at top end of upgraded guidance for 2016† 3 growth New product Pipeline Intense period of businesses contribution progress in 2016 R&D activity +9% CER Filed 4 assets for reg approval Expect key data on 20-30 Annual sales from 11 new (+5% pro- a
Slide 9: Simon Dingemans, CFO
Simon Dingemans_" CFO
Slide 10: Headline results
Headline results Broad-based sales growth and improved core operating leverage 2016 Reported growth % Pro-forma growth % £m £m CER £ CER Turnover 27,889 6 17 5 Total operating profit 2,598 (86) (75) Total EPS 18.8p (99) (89) Core operating profit 7,771 14 36 17 Core EPS 102.4p 12 35 Dividend 80p Fla
Slide 11: Results reconciliation
Results reconciliation 2016 full year results Intangible amortisation Total and Major Acquisition Disposals Core results impairment restructuring Legal related and other results Turnover (£bn) 27.9 27.9 Operating profit (£bn) 2.6 0.6 1.0 0.2 3.9 (0.5) 7.8 EPS (pence) 18.8 9.7 15.6 3.0 61.6 (6.3) 102
Slide 12: Sales growth +6% reported, +5% pro-forma
Sales growth +6% reported, +5% pro-forma New products helped deliver growth across all three businesses Reported results Pro-forma results 2015 reported sales £23.9bn 2015 pro-forma sales £24.1bn Pharma £0.4bn +3% Pharma £0.6bn +4% Vaccines £0.5bn +14% Vaccines £0.4bn +12% Consumer £0.6bn +9% Consum
Slide 13: Core operating margin
Core operating margin Pro-forma margin up +2.6% CER, with improved leverage across all three businesses Reported results Pro-forma results Sales up 6% CER Sales up 5% CER 2015 core reported margin 23.9% 2015 core pro-forma margin 23.3% COGS up 5% CER +0.3% COGS up 3% CER +0.6% SG&A up 2% CER +1.2% S
Slide 14: Accelerated delivery of restructuring benefits
Accelerated delivery of restructuring benefits Incremental annual savings of £1.4 billion delivered in 2016 3.0 £bn 0.2 FX benefit Total programme benefits of £3bn Total programme costs of up to £5bn 0.2 structural 2.8 • Up to £3.65bn cash savings 0.8 1.6 • Up to £1.35bn non cash 0.6 £3.7bn expensed
Slide 15: Operating profit to net income
Operating profit to net income Higher tax and minorities reflect growth in US, Consumer and HIV 2015 2016 2017 Core £m £m Outlook* Operating profit 5,729 7,771 Net finance expense (636) (652) Modest increase Share of associates (2) 5 Tax (993) (1,509) 21-22% Tax rate 19.5% 21.2% Minorities (440) (63
Slide 16: Cash generation and net debt
Cash generation and net debt £m 346 2,202 1,077 383 1,038 969 4,743 Funded by disposal proceeds 3,881 13,804 11,602 10,727 Net debt Free cash Ordinary Special Restructuring HIV Disposals Legal & other FX impact** Net debt 31/12/2015 flow excl. dividends dividend acquisitions 31/12/2016 defined and i
Slide 17: Continued progress expected in 2017
Continued progress expected in 2017* Subject to impact of possible Advair generics US Advair scenarios: Continued growth from new products Assuming no generic, Core EPS up expect US Advair sales Disciplined cost control down 15-20% CER 5 to 7% CER & restructuring savings Continued R&D pipeline progr
Slide 18: Appendix
Appendix
Slide 19: Currency
Currency 2016 currency sales exposure 2017 core EPS ready reckoner US $ 36 % US $ Euro € 20 % 10 cents movement in average exchange rate for full year impacts EPS by approx. +/- 3.5% Japanese ¥ 7% Other* 37 % Euro € 10 cents movement in average exchange rate for full year * The other currencies that
Slide 20: 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