GlaxoSmithKline : JP Morgan Healthcare Conference Presentation PDF - 735.4KB

New GSK: new ambitions for patients, shareholders and our people

Emma Walmsley, CEO

J.P.Morgan Healthcare Conference | January 2022

Cautionary statement regarding forward-looking statements

This presentation maycontain forward-looking statements. Forward-looking statements give the Group's current expectations or forecasts of future events. An investor can identify these statements bythe fact that they do not relate strictly to historical or current facts. They use words such as 'anticipate', 'estimate', 'expect', 'intend', 'will', 'project', 'plan', 'believe', 'target' and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective products or product ap provals, future performance or results of current and anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, dividen d payments and financial results.

Other than in accordance with its legal or regulatoryobligations (including under the Market Abuse Regulations, UK Listing R ules and the Disclosure Guidance and TransparencyRules of the Financial Conduct Authority), the Group undertakes no obligation to update any forward -looking statements, whether as a result of new information, future events or otherwise. Investors should, however, consult anyadditional disclosures that the Group may make in any documents which it publishes and/or files with the US Securities and Exchange Commission (SEC). All investors, wherever located, should take note of these disclosures.

Accordingly, no assurance can be given that any particular expectation will be met and investors are cautioned not to place u ndue reliance on the forward- looking statements.

Forward-looking statements are subject to assumptions, inherent risks and uncertainties, manyof which relate to factors that ar e beyond the Group's control or

precise estimate. The Group cautions investors that a number of important factors, including those in this presentation, coul d cause actual results to differ materiallyfrom those expressed or implied in anyforward-looking statement. Such factors include, but are not limited to, those discussed under Item 3.D 'Risk factors' in the Group's Annual Report on Form 20-F for FY 2020 and any impacts of the COVID-19 pandemic. Any forward-looking statements made byor on behalf of the Group speak only as of the date they are made and are based upon the knowledge and information available to the Directors on the date of this presentation.

1. number of adjusted measures are used to report the performance of our business, which are non -IFRS measures. These measures are defined and reconciliations to the nearest IFRS measure are available in our third quarter 2021 earnings release and Annual Report on For m 20-F for FY 2020.

All outlooks, ambitions, expectations and targets regarding future performance and the dividend should be read together with the section "Outlook, assumptions

and cautionary statements" on pages 60 and 62 of our third quarter 2021 earnings release and the "Basis of preparation, assum ptions and cautionary statements" section set out on pages 5-7 of our stock exchange announcement relating to an update to investors dated 23 June 2021.

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New GSK: new ambitions for patients, shareholders and our people

Morethan5%salesand10% adjustedoperatingprofitCAGR2021-26 Progressivedividendpolicy

Pipeline-drivengrowthto morethan£33bnsalesby2031

PrioritiseVaccinesandSpecialtyMedicines,maximisescientific opportunitiesin preventionandtreatment

OptimisedGeneralMedicinesportfolioforprofitabilityandcash

Strengthenedbalancesheetto supportinvestmentin growth

OperatesustainablywithleadingESGperformance

Positivelyimpacthealthofmorethan2.5bnpeoplein next10years

All outlooks, targets, ambitions and expectations regarding future performance and the dividend	should be read together with the section "Basis of preparation, assumptions and
cautionary statements" on pages 5-7 of our stock exchange announcement relating to an update	to investors dated 23 June 2021 and the "Outlook, assumptions and cautionary
statements" on pages 60 and 62 of our third quarter 2021 earnings release. All outlook and ambition statements are given on a constant currency basis and use 2021 forecast
exchange rates as a base, assuming a continuation of Q1 2021 closing rates. CAGR is for the 5 years to 2026, using 2021 as the base year. Pipeline sales are risk-adjusted and	3
include anticipated sales of new products and Life Cycle Innovation (LCI) launched from 2021 onwards. Note: COVID therapeutic and vaccine solutions are excluded from the above.

Delivering major strategic transformation and cultural change

2017 focus areas

Today

R&D pipeline

Commercial

Innovation

Improved

Strengthened

Transformed

performance

R&D

commercial

execution,

and

whilst

and pipeline

execution

portfolio focus,

productivity

investing

cost discipline

in R&D

Performance

Group

Optimised

Created new

Leading ESG

product

world leader

performance

structure and

Culture and

portfolio

in Consumer

and new

capital

talent

Trust

and network

Healthcare

culture

allocation

progress

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Significant scale of change and delivery since 2017

Improved performance whilst investing in R&D

	2017	2020	9M 2021
Sales	£30.2bn	£34.1bn	£24.6bn
Adj OP	£8.6bn	£8.9bn	£6.9bn
Op cash flow1	£8.3bn	£10.1bn	£4.2bn
R&D2	£3.9bn	£4.6bn	£2.5bn

Optimised product

portfolio and network (new GSK)

• 44% to 60% sales in Vaccine & Specialty
• 28% reduction in manufacturing sites
• On track for £1.5bn annual cost savings
• £1.4bn divestments 4

Strengthened R&D and pipeline

• 13 approvals since 2017 - top quartile
• • R&D spend per launch
  • Median PYS3 per launch
  • 95% success rate (P3/pivotal)
• Strong pipeline: 63 vaccines and medicines. 23 in pivotal studies

Created new world leader in Consumer Healthcare

• 2020 £10bn sales, 4% sales growth5
• Two integrations completed to deliver >£1bn in annual cost savings
• Transformed portfolio. £4bn divestments
• 25% increase in adjusted operating profit

Transformed commercial execution

• £10bn annual new and specialtysales
• Industry-leadinglaunch from Shingrix
• Trelegy and two-drug regimens >£1bn
• Driving inflection points in mid-cycle medicines and vaccines

Leading ESG performance and new culture progress

• Global health, I&D, environment
• Top 125: 85% new in role since 2017, 31% external, 39% women; Science Top Employer
• Record levels of employee engagement
• New incentive scheme

1. Op cash flow: Cash generated from operations 2. Adjusted R&D spend 3. Peak year sales 4. Divestment proceeds are stated on pre-tax basis

5. Consumer Health sales growth is CER on a pro forma basis and excludes brands divested / under review.

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