1st Quarter Results

RNS Number : 9456K
GlaxoSmithKline PLC
28 April 2010
 



 

Issued: Wednesday, 28th April 2010, London, U.K.

 

Results announcement for the first quarter 2010

 

GSK delivers Q1 EPS of 30.7p +16% CER

 before major restructuring*

-  Q1 sales £7.4bn up 13% CER

-  Underlying sales (excluding pandemic products) up 4% CER

 

 

Results before major restructuring*


Q1 2010


Growth



£m

CER%

£%


Turnover

7,357 

13

9

 

Earnings per share

17

 

 

Total results


Q1 2010


Growth



£m

CER%

£%


Turnover

7,357 

13

9

 

Restructuring charges

301 

 

 

 

Earnings per share

26.4p

18

18

 

 

The full results are presented under 'Income Statement' on page 8.

* For explanations of the measures 'results before major restructuring' and 'CER growth', see page 7.

 

 

Summary

 

·

Good strategic progress delivers continued sales growth: Q1 sales £7.4bn up 13%


-   Pharmaceutical sales +14% to £6.1bn: Emerging Markets (+43%), Asia Pacific/Japan (+45%), Europe (+16%), USA (-1%), ViiV Healthcare (-7%)

-   Consumer Healthcare sales +9% to £1.2bn, with market share gains across all categories (OTC, oral care, nutritionals)

-   Sales from 'white pills/western markets': 27% of Q1 sales (32% in Q1 2009)



·

Sustained new product momentum and pipeline delivery


-   Sales of new products totalled £412m +65% (£1.1bn including pandemic products)

-   EU approvals: Revolade, Arzerra and Duodart. EU positive opinion: Votrient

-   Planned Q2 filings for Benlysta in USA and EU

-   Phase III start for Relovair in asthma


 

·

Operational Excellence programme on track to deliver £2.2bn of cumulative annual cost savings by 2012, with £1.5bn expected by end of 2010


 

·

Net cash inflow from operating activities £2.1bn up 22% in sterling terms


 

·

Progressive dividend policy continues with Q1 dividend of 15p (+7%).


 


 

 

 

GSK's strategic priorities

 

GSK has focused its business around the delivery of three strategic priorities, which aim to increase growth, reduce risk and improve GSK's long-term financial performance:

 

 

·

Grow a diversified global business

·

Deliver more products of value

·

Simplify GSK's operating model

 

Chief Executive Officer's Review

 

 

With continued sales growth in the first quarter, I believe GSK is demonstrating sustained business performance and that we are making good progress in delivering our strategy.

 

Our sales growth is multi-sourced with good performances in our Pharmaceuticals business, driven by vaccines, respiratory and dermatology products and in our Consumer Healthcare business.  In all of these areas, sales were especially dynamic across emerging markets where we continue to gain market share.

 

Group turnover grew 13% aided by sales of pandemic influenza products (pandemic vaccine and Relenza).  Excluding these products, underlying sales grew 4% to £6.6 billion. Sales from 'white pills/western markets' for the first quarter were approximately 27% (excluding sales of pandemic vaccine).  This compares to 32% of sales in Q1 2009, a significant reduction and a reflection of the growing diversification of our business.

 

Established products such as Seretide/Advair and newer products, such as Cervarix, Synflorix and Tykerb helped to drive this good underlying performance.  Total new product sales were over £400m (+65%) and including pandemic products were more than £1 billion.

 

Brand innovation, global expansion and continued investment in marketing, is also driving growth of our Consumer Healthcare business.  This quarter sales grew 9%, significantly faster than estimated global market growth of 1%.  Total sales were £1.2 billion, with brand innovations launched in the last 3 years representing approximately 14% of sales.  All these strategies are helping to drive continued market share gains across all the business segments in which we operate.

 

Proactive succession planning in our key business areas is very important and in the last few months, we have made new appointments to maintain excellent leadership in both Vaccines and Consumer Healthcare over the longer-term.

 

This first quarter also saw some early signs of recovery for our US pharmaceuticals business, with sales down 1% (Q1 2009: -24%), as the balance within our portfolio between genericisation and new products begins to move in our favour.

 

We welcome the passage of healthcare reform in the USA this quarter, which will bring essential healthcare to millions of previously uninsured Americans and, for the industry, will provide greater certainty and stability.  Clearly, the reform results in increased discounts for medicines particularly related to government programmes like Medicaid.  In the first quarter we have been able to absorb this adverse financial impact and we expect to offset any further impact through continued operational performance.  The transformation we have already instigated within our US business has been focused on ensuring that we are fit to compete in the environment created by this reform.

 

 

 

We also continue to re-shape the company through simplification and cost containment initiatives, which are on track to deliver annual cumulative cost savings of £2.2 billion by 2012 of which £1.5 billion is expected to be achieved by the end of this year.  In addition, I am pleased with the progress we are making with the integration of Stiefel and we remain on track to deliver up to £155 million of savings from this programme by 2012.

 

This focus on cost control is guided by our strategy to improve returns on invested capital and is enabling us to invest effectively in growth markets.  As a result, we still expect to deliver a broadly stable operating margin, before legal charges, for 2010.

 

Legal charges for this quarter increased versus the same quarter last year.  This increase is a direct consequence of the progress we are making towards settlement of a number of existing cases.

 

Over these last few months, many companies have seen further public debate concerning drug safety and industry integrity.  For GSK, this has related particularly to our diabetes medicine, Avandia.  For us patient safety is an absolute priority and we continue to believe that the allegations made by some of our critics that we acted improperly around this medicine are unfounded.  This debate is indicative of the pressures and challenges that our industry must face and reinforces the need for continued openness and transparency - an agenda GSK has strongly pursued since I took over as CEO.  There is no question of us letting up on this as it is in the interest of patients and our business.

 

 

In conclusion, GSK has made a good start to 2010 and this provides further confirmation that our strategy is working.  We have increased the dividend for the quarter to 15p and remain confident of our prospects for the year.

 

 

Andrew Witty

Chief Executive Officer

 

To hear more from Andrew on GSK's Q1 Results, please visit:  www.gsk.com

 

 

 

Trading update

 

Turnover and key product movements impacting growth for the quarter

Total Group turnover rose 13% to £7.4 billion, with pharmaceutical sales up 14% and Consumer Healthcare sales up 9%.  Underlying sales performance in the quarter - excluding the benefit from significant sales of pandemic related products including H1N1 vaccine and Relenza - was also positive at 4%.

 

On a regional basis, a slight decline in US pharmaceutical sales (-1% to £1.9 billion) due to the continued impact of generic competition to several mature products, was offset by strong growth in all other regions: Europe (+16% to £1.9 billion), Emerging Markets (+43% to £866 million) and Asia Pacific/Japan (+45% to £885 million).

 

Sales of Seretide/Advair rose 9% to £1.3 billion, with strong growth in Europe (+10% to £423 million), Emerging Markets (+28% to £80 million) and Japan (+35% to £46 million).  US Advair sales rose 4% to £630 million.  Flovent sales (+5% to £196 million) benefited from the re-initiation of promotion in the USA where sales rose 8% to £99 million.  Avamys/Veramyst sales increased 52% to £46 million, with strong growth in Europe more than offsetting a slight decline in the USA.

 

Total vaccine sales were £1.4 billion, including £698 million of H1N1 vaccine sales.  Sales of Synflorix, which was launched in 2009, were £45 million, while Cervarix sales grew 60% to £77 million.  Hepatitis vaccines also grew strongly (+38% to £197 million) benefiting from supply shortages of competitor products in the US market.  Rotarix sales (+19% to

£65 million) were not significantly impacted in the quarter by the FDA's decision in late March to suspend temporarily the product in the USA as a precautionary measure following the discovery of PCV-1 DNA material in the vaccine.  An FDA advisory committee meeting to review this matter is scheduled for 7th May.

 

Dermatology sales, including heritage GSK products and those acquired through the acquisition of Stiefel in July 2009, totalled £265 million in the quarter (8% growth on a proforma basis).  In addition, GSK's heritage consumer dermatology portfolio, reported within Consumer Healthcare, contributed sales of £62 million (+10%).

 

Other strong pharmaceutical performances in the quarter included Tykerb (+62% to

£53 million), Avodart (+20% to £139 million), Lovaza (+9% to £107 million) and Arixtra

(+25% to £70 million).

 

Sales of Valtrex declined 46% to £176 million, primarily as a result of generic competition to the product in the USA (-55% to £107 million) which began in November 2009.  Sales of Wellbutrin fell 67% to £20 million, reflecting the sale of Wellbutrin XL in the USA to Biovail in Q2 2009.  European sales of Wellbutrin rose 50% to £9 million.  The decline in Boniva sales

(-63% to £23 million) reflects the transfer on 1st January to Genentech of exclusive promotion of the product in the USA.  GSK now records income from Genentech related to the product in Other operating income.

 

ViiV Healthcare, the new speciality HIV company established by GSK and Pfizer was launched in November 2009.  HIV product sales were £373 million, down 7% on Q1 2009, in part reflecting the impact of US healthcare reforms.  In addition the impact of competition to established products such as Combivir (-23% to £82 million) was not fully offset by the inclusion of Selzentry and Viracept.

 

Total Consumer Healthcare sales rose 9% (to £1.2 billion), significantly ahead of estimated market growth of approximately 1%, with growth in all regions: North America (+3%), Europe (+9%), and Rest of World (+13%) and in all categories: OTC products (+11% to £617 million), Oral care (+5% to £381 million) and Nutritionals (+12% to £233 million).

 

 

 

 

Within OTC, launches of the new Mini lozenge helped grow the smoking control franchise (+16% to £92 million).  The launch of the Mini in the USA began at the end of March 2010.  Sales of alli more than doubled to £63 million, benefiting significantly from the launch of the product in Europe which began at the end of March 2009.  The Panadol franchise also grew strongly (+14% to £117 million), helped by the acquisition of Alvedon in 2009.  Sales of respiratory tract products declined 8% to £94 million, in part due to a relatively weak flu season.

 

Within Oral care, Sensodyne franchise sales continued to grow strongly (+21% to £133 million), offsetting a decline in Poligrip sales (-29% to £15 million) following the company's decision in February to end production of the zinc-containing product and to move to zinc-free alternatives.  Zinc-free alternatives are expected to be fully available in all major markets by May 2010.

 

Nutritionals performance was driven by sales growth of all major products including Horlicks (+17% to £87 million), Lucozade (+5% to £82 million) and Ribena (+11% to £42 million).

 

 

 

Operating profit and earnings per share commentary

Results before major restructuring

Operating profit before major restructuring for Q1 2010 was £2,395 million, a 21% growth in CER terms.

 

Cost of sales increased to 26.2% of turnover (Q1 2009: 24.3%), reflecting the impact of generic competition to higher margin products in the USA, principally Valtrex, changes in business and product mix and £94 million of stock write-offs in the quarter.  The company continues to expect cost of sales as a percentage of turnover to be around 26% for the full year.

 

SG&A costs as a percentage of turnover were 31.2%, broadly in line with the prior year.  Legal costs of £210 million in the quarter reflected progress being made towards settlement of a number of existing cases.  Excluding legal charges, SG&A costs were 28.3% of turnover and the company continues to expect SG&A costs excluding legal charges to be around 29% of turnover for the full year.

 

R&D expenditure decreased to 12.8% of turnover (Q1 2009: 15.9%), reflecting the phasing of project expenditure, good progress on efficiency savings and a positive comparison to the prior year which included significant intangible asset write-off costs.  The company continues to expect R&D costs as a percentage of turnover to be around 14% for the full year.

 

Other operating income was £199 million in the quarter, including royalty income of

£80 million (Q1 2009: £67 million).  Other operating income also included a receipt relating to the transfer on 1st January 2010 to Genentech of exclusive promotion rights to Boniva in the USA.  No further receipts from Genentech related to this transaction are expected this year.

 

Overall, the company continues to expect the operating profit margin in 2010 to be broadly similar to 2009 (excluding legal costs and the 2009 ViiV Healthcare one-time gain).

 

The charge for taxation on profit before major restructuring amounted to £618 million and represents an effective tax rate of 27.7% (Q1 2009: 29.0%).  The effective tax rate for the full year is expected to be around 28%.

 

EPS before major restructuring of 30.7p increased 16% in CER terms (a 17% increase in sterling terms) compared with Q1 2009.  A negative impact of 5% from currency movements was offset by exchange gains on the settlement of intercompany transactions in the quarter.

 

 

 

Total results after restructuring

Operating profit after restructuring for Q1 2010 was £2,094 million, up 22% in both CER and sterling terms.  This included £301 million of charges related to restructuring (Q1 2009: £264 million); £28 million was charged to cost of sales (Q1 2009: £143 million), £52 million to SG&A (Q1 2009: £71 million) and £221 million to R&D (Q1 2009: £50 million).

 

EPS after restructuring of 26.4p increased 18% in both CER and sterling terms compared with Q1 2009.

 

Cash flow and net debt

Net cash inflow from operating activities for Q1 2010 was £2,122 million, up 22% in sterling terms. This was used to fund net interest of £21 million, capital expenditure on property, plant and equipment and intangible assets of £326 million, repayment of short-term loans of

£625 million and the dividend paid to shareholders of £763 million.

 

Net debt decreased by £0.4 billion during the period to £9.0 billion at 31st March 2010, comprising gross debt of £16.2 billion and cash, cash equivalents and liquid investments of £7.2 billion.  At 31st March 2010, GSK had short-term borrowings (including overdrafts) repayable within 12 months of only £1 billion with no further borrowings repayable in the subsequent year.

 

Dividends

The Board has declared a first interim dividend of 15 pence per share (Q1 2009: 14 pence). The equivalent interim dividend receivable by ADR holders is 46.0320 cents per ADS based on an exchange rate of £1/$1.5344.  The ex-dividend date will be 5th May 2010, with a record date of 7th May 2010 and a payment date of 8th July 2010.

 

Currency impact

The Q1 results are based on average exchange rates, principally £1/$1.56, £1/€1.13 and £1/Yen 143.  Comparative exchange rates are given on page 20.  The period end exchange rates were £1/$1.52, £1/€1.12 and £1/Yen 142.  If exchange rates were to hold at these period end levels for the rest of 2010 and there were no exchange gains or losses in subsequent quarters, the estimated positive impact on 2010 sterling EPS growth before major restructuring would be approximately 5 percentage points.

 

Additional P&L information

to 23.

 

 

 

GlaxoSmithKline (GSK) together with its subsidiary undertakings, the 'Group' - one of the world's leading research-based pharmaceutical and healthcare companies - is committed to improving the quality of human life by enabling people to do more, feel better and live longer. GlaxoSmithKline's website www.gsk.com gives additional information on the Group. Information made available on the website does not constitute part of this document.

 

 

Enquiries:

 

 

UK Media

 

Philip Thomson

Claire Brough

Alexandra Harrison

Stephen Rea

Jo Revill

 

(020) 8047 5502

(020) 8047 5502

(020) 8047 5502

(020) 8047 5502

(020) 8047 5502






US Media

Nancy Pekarek

Mary Anne Rhyne

Kevin Colgan

Sarah Alspach

(919) 483 2839

(919) 483 2839

(919) 483 2839

(919) 483 2839






European Analyst / Investor

David Mawdsley

Sally Ferguson

Gary Davies

(020) 8047 5564

(020) 8047 5543

(020) 8047 5503






US Analyst / Investor

Tom Curry

Jen Hill Baxter

(215) 751 5419

(215) 751 7002

 

 

 

Results before major restructuring

Results before major restructuring is a measure used by management to assess the Group's financial performance and is presented after excluding restructuring charges relating to the Operational Excellence programme, which commenced in October 2007 and the acquisitions of Reliant Pharmaceuticals in December 2007 and Stiefel in July 2009.  Management believes that this presentation assists shareholders in gaining a clearer understanding of the Group's financial performance and in making projections of future financial performance, as results that include such costs, by virtue of their size and nature, have limited comparative value.

 

CER growth

In order to illustrate underlying performance, it is the Group's practice to discuss its results in terms of constant exchange rate (CER) growth.  This represents growth calculated as if the exchange rates used to determine the results of overseas companies in Sterling had remained unchanged from those used in the comparative period.  All commentaries are presented in terms of CER growth, unless otherwise stated.

 

 

Brand names and partner acknowledgements

Brand names appearing in italics throughout this document are trademarks of GSK or associated companies or used under licence by the Group.

 

Cautionary statement regarding forward-looking statements

Under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995, the company cautions investors that any forward-looking statements or projections made by the company, including those made in this Announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected.  Factors that may affect the Group's operations are described under 'Risk Factors' in the 'Business Review' in the company's Annual Report on Form 20-F for 2009.

 

 


 

 

GlaxoSmithKline plc, 980 Great West Road, Brentford, Middlesex TW8 9GS, United Kingdom

Registered in England and Wales.  Registered number: 3888792

 

 

Income statement

 

Three months ended 31st March  2010


Results
before major
restructuring
Q1 2010

Growth

Major
restructuring
Q1 2010


Total
Q1 2010

Results
before major
restructuring
Q1 2009

Major
restructuring
Q1 2009



Total
Q1 2009

£m

CER%

£m

£m

£m

£m

£m



TURNOVER

7,357 

13 


7,357 

6,769 


6,769 









Cost of sales

(1,924)

19 

(28)

(1,952)

(1,644)

(143)

(1,787)


 

 

 

 

 

 

Gross profit

5,433 

11 

(28)

5,405 

5,125 

(143)

4,982 









Selling, general and
   administration

(2,298)

18 

(52)

(2,350)

(2,129)

(71)

(2,200)

Research and development

(939)

(9)

(221)

(1,160)

(1,074)

(50)

(1,124)

Other operating income

199 



199 

54 


54 


 

 

 

 

 

 

OPERATING PROFIT

2,395 

21 

(301)

2,094 

1,976 

(264)

1,712 









Finance income

17 



17 

28 


28 

Finance expense

(204)


(1)

(205)

(202)

(1)

(203)

Profit on disposal of interest
   in associate

- 



- 

115 


115 

Share of after tax profits of
   associates and joint
   ventures

25 



25 

14 


14 


 

 

 

 

 

 

PROFIT BEFORE TAXATION

2,233 

16 

(302)

1,931 

1,931 

(265)

1,666 









Taxation

(618)


82 

(536)

(560)

63 

(497)

Tax rate %

27.7%



27.8%

29.0%


29.8%


 

 

 

 

 

 

PROFIT AFTER TAXATION FOR THE PERIOD

1,615 

18 

(220)

1,395 

1,371 

(202)

1,169 


 

 

 

 

 

 









Profit attributable to

   non-controlling interests

55 



55 

38 


38 

Profit attributable to
   shareholders

1,560 


(220)

1,340 

1,333 

(202)

1,131 


 

 

 

 

 

 


1,615 


(220)

1,395 

1,371 

(202)

1,169 


 

 

 

 

 

 









EARNINGS PER SHARE

30.7p

16 


26.4p

26.3p


22.3p


 

 

 


 









Diluted earnings per share

30.4p



26.1p

26.2p


22.2p


 

 

 


 

 

 

 

 

Pharmaceuticals turnover

Three months ended 31st March 2010

 

Total 

USA 

Europe 

Rest of World 


---------------

---------------

---------------

---------------


£m 

CER%

£m 

CER%

£m 

CER%

£m 

CER%

 

------

------

------

------

------

------

------

------

Respiratory

1,766

6 

805

3 

569

6 

392

13 

Avamys/Veramyst

46

52 

17

(10)

13

56 

16

>100 

Flixonase/Flonase

45

(30)

6

(40)

10

(17)

29

(32)

Flixotide/Flovent

196

5 

99

8 

45

(6)

52

8 

Seretide/Advair

1,264

9 

630

4 

423

10 

211

25 

Serevent

51

(16)

16

(11)

26

(16)

9

(25)

Ventolin

116

3 

35

- 

37

- 

44

7 

Zyrtec

20

17 

-

- 

-

- 

20

17 










Anti-virals

358

(44)

154

(42)

35

(78)

169

(20)

Relenza

84

(60)

30

>100 

2

(97)

52

(49)

Valtrex

176

(46)

107

(55)

23

(43)

46

- 

Zeffix

52

4 

3

- 

7

- 

42

5 

 









Central nervous system

417

(13)

136

(32)

140

(2)

141

7 

Imigran/Imitrex

57

(9)

24

(11)

22

(12)

11

- 

Lamictal

120

(11)

61

(23)

37

(3)

22

26 

Requip

55

14 

10

38 

36

13 

9

- 

Seroxat/Paxil

106

(12)

10

(29)

22

(21)

74

(6)

Treximet

13

7 

13

7 

-

- 

-

- 

Wellbutrin

20

(67)

8

(85)

9

50 

3

- 










Cardiovascular and urogenital

570

9 

337

6 

153

11 

80

23 

Arixtra

70

25 

39

27 

26

23 

5

25 

Avodart

139

20 

76

12 

40

17 

23

77 

Coreg

42

(12)

42

(12)

-

- 

-

- 

Fraxiparine

56

4 

-

-

43

- 

13

17 

Lovaza

107

9 

107

10 

-

- 

-

- 

Vesicare

25

13 

25

13 

-

- 

-

- 

Volibris

9

>100 

-

- 

8

>100 

1

- 

 









Metabolic

230

(18)

89

(36)

61

(7)

80

7 

Avandia products

169

(10)

89

(14)

38

(12)

42

2 

Bonviva/Boniva

23

(63)

-

- 

20

(5)

3

- 

 









Anti-bacterials

356

(6)

24

(10)

142

(21)

190

10 

Augmentin

160

(10)

8

(44)

63

(23)

89

9 

 









Oncology and emesis

169

23 

92

41 

50

- 

27

17 

Arzerra

5

- 

5

- 

-

- 

-

- 

Hycamtin

40

- 

24

- 

13

(7)

3

50 

Promacta

6

>100 

6

>100 

-

- 

-

- 

Tyverb/Tykerb

53

62 

17

73 

24

41 

12

100 

Votrient

5

- 

5

- 

-

- 

-

- 

 









Vaccines

1,411

>100 

171

55 

613

>100 

627

>100 

Boostrix

30

19 

15

55 

9

25 

6

(43)

Cervarix

77

60 

2

- 

59

51 

16

78 

Fluarix, FluLaval

5

(43)

1

- 

-

- 

4

(50)

Flu Pandemic

698

>100 

-

- 

304

>100 

394

>100 

Hepatitis

197

38 

92

92 

61

2 

44

19 

Infanrix, Pediarix

166

(3)

32

(13)

104

(2)

30

4 

Rotarix

65

19 

27

93 

13

8 

25

(14)

Synflorix

45

- 

-

- 

12

- 

33

- 

 









Dermatologicals

265

>100 

97

100 

62

>100 

106

83 

Bactroban

27

(7)

11

(20)

6

- 

10

11 

Dermovate

15

- 

-

- 

4

- 

11

- 

Duac

27

- 

17

- 

6

- 

4

- 

Soriatane

18

- 

18

- 

-

- 

-

- 

Zovirax

49

61 

26

>100 

7

(13)

16

(11)










Other

211

20 

4

(20)

68

24 

139

20 


------

------ 

------

------

------

------

-----

------


5,753

15 

1,909

(1)

1,893

16 

1,951

39 




------

------

------

------

-----

------

ViiV Healthcare (HIV)

373

(7)

159

(11)

159

(3)

55

(4)

Combivir

82

(23)

34

(30)

33

(17)

15

(17)

Epivir

28

(15)

10

(15)

10

(21)

8

- 

Epzicom/Kivexa

131

(1)

48

(10)

64

6 

19

6 

Lexiva

41

(8)

21

(15)

15

(12)

5

50

Selzentry

19

- 

8

- 

11

- 

-

- 

Trizivir

38

(27)

19

(33)

17

(29)

2

100 


------

------ 

------

------

------

------

-----

------


6,126

14 








------

------ 







Pharmaceutical turnover includes co-promotion income.

 

 

 

Consumer Healthcare turnover

Three months ended 31st March 2010

 

Total 

USA 

Europe 

Rest of World 


--------------

--------------

--------------

--------------


£m

CER%

£m

CER%

£m

CER%

£m

CER%

 

------

-----

------

-----

------

-----

------

-----

 









Over-the-counter medicines

617

11 

169

2 

190

21 

258

11 

alli

63

>100 

28

7 

34

>100 

1

- 

Breathe Right

21

(19)

11

(21)

5

(14)

5

(17)

Cold sore franchise

25

9 

10

22 

12

9 

3

(33)

Nicotene replacement therapy

92

16 

62

16 

19

12 

11

29 

Panadol

117

14 

-

- 

27

30 

90

10 

Tums

26

(7)

22

(11)

-

- 

4

33 

 









Oral healthcare

381

5 

77

6 

179

(1)

125

16 

Aquafresh franchise

123

(3)

25

- 

67

(8)

31

7 

Biotene

7

17 

5

- 

1

- 

1

- 

Denture care

76

(3)

16

(11)

24

(11)

36

9 

Sensodyne franchise

133

21 

30

23 

50

9 

53

33 










Nutritional healthcare

233

12 

-

- 

102

7 

131

16 

Horlicks

87

17 

-

- 

6

20 

81

17 

Lucozade

82

5 

-

- 

67

3 

15

13 

Ribena

42

11 

-

- 

29

16 

13

- 


------

-----

------

-----

------

-----

------

-----


1,231

9 

246

3 

471

9 

514

13 


------

-----

------

-----

------

-----

------

-----

 

 

Statement of comprehensive income

Q1 2010
£m

Q1 2009
£m

 

 

 

(13)

(4)

 

 

 

 

 

 

 

GSK's late-stage pharmaceuticals and vaccines pipeline

 

The table below is provided as part of GSK's quarterly update to show events and changes to the late stage pipeline during the quarter and up to the date of announcement. 

 

The following assets were listed as approved or terminated in the last quarterly update and are no longer included in the table: Cervarix, Tykerb IBC

 

Biopharmaceuticals

USA

EU

News update in the quarter


CLL

Approved

Approved

Apr 2010

 Approved in the EU on

19th April 2010.


NHL (FL)

Ph III

Ph III


Arzerra
(ofatumumab)

NHL (DLBCL)

Ph III

Ph III



RA

Ph III

Ph III


Benlysta
(belimumab)

Systemic lupus

Ph III

Ph III

Announced headline BLISS 76 76 week data on 20th April 2010.

Expect to file in Q2 2010.

otelixizumab

Type 1 diabetes

Ph III

Ph III


Syncria

Type 2 diabetes

Ph III

Ph III


Prolia (denosumab)

Post menopausal osteoporosis

n/a

Filed


Cardiovascular & Metabolic

USA

EU

News update in the quarter

Arixtra

Acute coronary syndrome

Filed

Approved


Avandamet XR

Type 2 diabetes

Ph III

Ph III

Filing strategy under review.

Avandia + statin

Type 2 diabetes

Ph III

Ph III

Filing strategy under review.

darapladib

Atherosclerosis

Ph III

Ph III


Neurosciences


USA

EU

News update in the quarter

Horizant

RLS

Filed

Ph III

Complete Response letter received 17th February 2010.

almorexant

Primary insomnia

Ph III

Ph III


retigabine

Epilepsy

Filed

Filed


Oncology


USA

EU

News update in the quarter

 

Promacta/Revolade

Chronic  ITP

Approved

Approved

Mar 2010

Approved in the EU on

11th March 2010.


Hepatitis C

Ph III

Ph III

Recruitment complete.


CLD

Ph III

Ph III

Chronic liver disease study closed and data presented at EASL 17th April 2010.  Next steps under review.


Prostate cancer prevention

Refiled

Mar 2010

Filed

 

Refiled in USA on 29th March 2010.

Avodart

Duodart/Flodart (fixed dose combination with tamsulosin)

Tentative approval
Jan 2010

Approved

Mar 2010

Approved in Switzerland on

22nd March 2010 and in EU via Decentralised Procedure on

31st March 2010.

 

 

Oncology / contd.

USA

EU

News update in the quarter

 

Votrient

Renal cell cancer

Approved

Filed

CHMP positive opinion

19th February 2010. Enrolment complete in Sutent head-to-head study

 

(pazopanib)

Sarcoma

Ph III

Ph III

Recruitment complete.

 


Ovarian

Ph III

Ph III


 


First-line metastatic

Approved
Jan 2010

Filed

CHMP positive opinion

19th February 2010.

 

Tykerb

Adjuvant breast cancer

Ph III

Ph III


 


Head & neck cancer

Ph III

Ph III


 


Gastric cancer

Ph III

Ph III


 

pazopanib + Tykerb

Inflammatory breast cancer

Ph III

Ph III

No longer pursuing this indication.

 

Respiratory & Immuno-inflammation

USA

EU

News update in the quarter

 

Relovair
HORIZON
('444 & '698)

COPD/Asthma

Ph III

Ph III

Phase III asthma programme commenced in March 2010.

 

Vaccines


USA

EU

News update in the quarter

 

Menhibrix
(HibMenCY-TT)

MenCY and Hib prophylaxis

Filed

n/a

Date for expected VRBPAC meeting has not yet been set.

 

MAGE-A3

Melanoma

Ph III

Ph III


 


NSCLC

Ph III

Ph III


 

Nimenrix
(MenACWY)

MenACWY prophylaxis

Ph III

Ph III

Plan to file in EU in H2 2010.

 

New generation flu

Influenza prophylaxis

Ph III

Ph III


 

Simplirix

Genital herpes prophylaxis

Ph III

Ph III


 

Mosquirix

Malaria prophylaxis

n/a

n/a

Phase III study ongoing in Africa.

 

Balance sheet

31st March
2010
£m

31st March
2009
£m

31st December
2009
£m

ASSETS

----

----

----

Non-current assets

 

 

 

Property, plant and equipment

9,532

9,441

9,374 

Goodwill

3,524

2,147

3,361 

Other intangible assets

8,412

6,157

8,183 

Investments in associates and joint ventures

965

499

895 

Other investments

529

512

454 

Deferred tax assets

2,492

2,772

2,374 

Derivative financial instruments

94

112

68 

Other non-current assets

653

560

583 

 

----

----

---- 

Total non-current assets

26,201

22,200

25,292 

 

----

----

---- 

Current assets

 

 

 

Inventories

4,157

4,107

4,064 

Current tax recoverable

52

95

58 

Trade and other receivables

6,814

5,920

6,492 

Derivative financial instruments

87

258

129 

Liquid investments

254

364

268 

Cash and cash equivalents

6,964

6,221

6,545 

Assets held for sale

28

2

14 

 

----

----

---- 

Total current assets

18,356

17,570 

 

----

----

---- 

TOTAL ASSETS

44,557

42,862 

 

----

----

---- 

LIABILITIES

 

 

 

Current liabilities

 

 

 

Short-term borrowings

(1,034)

(1,276)

(1,471)

Trade and other payables

(6,796)

(5,752)

(6,772)

Derivative financial instruments

(127)

(254)

(168)

Current tax payable

(1,716)

(948)

(1,451)

Short-term provisions

(2,480)

(1,516)

(2,256)

 

----

----

---- 

Total current liabilities

(12,153)

(9,746)

(12,118)

 

----

----

---- 

Non-current liabilities

 

 

 

Long-term borrowings

(15,220)

(15,106)

(14,786)

Deferred tax liabilities

(667)

(717)

(645)

Pensions and other post-employment benefits

(3,280)

(3,227)

(2,981)

Other provisions

(1,191)

(1,529)

(985)

Derivative financial instruments

(6)

(2)

- 

Other non-current liabilities

(614)

(406)

(605)

 

----

----

---- 

Total non-current liabilities

(20,978)

(20,987)

(20,002)

 

----

----

---- 

TOTAL LIABILITIES

(33,131)

(30,733)

(32,120)

 

----

----

---- 

NET ASSETS

11,426

8,434

10,742 

 

----

----

---- 

 

 

 

 

EQUITY

 

 

 

Share capital

1,417

1,416

1,416 

Share premium account

1,384

1,340

1,368 

Retained earnings

6,822

4,619

6,321 

Other reserves

1,047

687

900 

 

----

----

---- 

Shareholders' equity

10,670

8,062

10,005 

 

 

 

 

Non-controlling interests

756

372

737 

 

----

----

---- 

TOTAL EQUITY

11,426

8,434

10,742 

 

----

----

---- 

 

 

 

Cash flow statement

 

 

Three months ended 31st March 2010

 

 

Q1 2010
£m

Q1 2009
£m

2009
£m

 

 

Profit after tax

1,395

1,169

5,669

 

Tax on profits

536

497

2,222

 

Share of after tax profits of associates and joint ventures

(25)

(14)

(64)

 

Profit on disposal of interest in associates

-

(115)

(115)

 

Net finance expense

188

175

713

 

Depreciation and other non-cash items

466

603

1,271

 

(Increase)/decrease in working capital

(277)

22

(106)

 

Increase/(decrease) in other net liabilities

122

(271)

(45)

 

 

----

----

----

 

Cash generated from operations

2,405

2,066

9,545

 

Taxation paid

(283)

(330)

(1,704)

 

 

----

----

----

 

Net cash inflow from operating activities

2,122

1,736

7,841

 

 

----

----

----

 

Cash flow from investing activities

 

 

 

 

Purchase of property, plant and equipment

(207)

(268)

(1,418)

 

Proceeds from sale of property, plant and equipment

17

7

48

 

Purchase of intangible assets

(119)

(120)

(455)

 

Proceeds from sale of intangible assets

-

-

356

 

Purchase of equity investments

(61)

(23)

(154)

 

Proceeds from sale of equity investments

10

1

59

 

Purchase of businesses, net of cash acquired

-

(501)

(2,792)

 

Investment in associates and joint ventures

(13)

(7)

(29)

 

Proceeds from disposal of interest in associates

-

178

178

 

Decrease in liquid investments

28

23

 

Interest received

19

41

90

 

Dividends from associates and joint ventures

2

3

17

 

 

----

----

----

 

Net cash outflow from investing activities

(324)

(666)

(4,013)

 

 

----

----

----

 

Cash flow from financing activities

 

 

 

 

Proceeds from own shares for employee share options

6 

3

13

 

Issue of share capital

17 

15

43

 

Shares acquired by ESOP Trusts

(56)

(50)

(57)

 

Increase in long-term loans

-

-

1,358

 

Repayment of short-term loans

(625)

(25)

(748)

 

Increase in short-term loans

15 

191

646

 

Net repayment of obligations under finance leases

(11)

(11)

(48)

 

Interest paid

(40)

(56)

(780)

 

Dividends paid to shareholders

(763)

(730)

(3,003)

 

Distributions to non-controlling interests

(67)

(41)

(89)

 

Other financing items

(93)

50

(109)

 

 

----

----

----

 

Net cash outflow from financing activities

(1,617)

(654)

(2,774)

 

 

----

----

----

 

 

 

 

 

 

Increase in cash and bank overdrafts in the period

181 

416

1,054

 

 

 

 

 

 

Exchange adjustments

103 

(11)

(158)

 

Cash and bank overdrafts at beginning of period

6,368 

5,472

5,472

 

 

----

----

----

 

Cash and bank overdrafts at end of period

6,652 

5,877

6,368

 

 

----

----

----

 

 

 

 

 

 

Cash and bank overdrafts at end of period comprise:

 

 

 

 

 

Cash and cash equivalents

6,964 

6,221

6,545

 

 

Overdrafts

(312)

(344)

(177)

 

 

----

----

----

 

 

6,652 

5,877

6,368

 

 

----

----

----

 

 

 

 

 

Statement of changes in equity


Share
capital
£m

Share
premium
£m

Retained
earnings
£m

Other
reserves
£m

Share-
holder's equity
£m

Non-controlling
interests
£m

Total
equity
£m

 

1,416

1,368

6,321

900

 

737

10,742

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

- 

 

 

 

 

 

 

 

 

 

 

 

 

Segmental information

 


 

GSK has revised its segmental information disclosures to reflect changes in the internal reporting structures with effect from 1st January 2010. ViiV Healthcare is now shown as a separate segment. Stiefel has been integrated with the GSK heritage dermatology business and is reported within the relevant geographical pharmaceutical segments. The other trading and other unallocated pharmaceuticals information has been combined. Comparative information has been restated onto a consistent basis.

 

GSK's operating segments are being reported based on the financial information provided to the Chief Executive Officer and the responsibilities of the Corporate Executive Team (CET). Individual members of the CET are responsible for geographic regions of the Pharmaceuticals business, ViiV Healthcare and for the Consumer Healthcare business as a whole, respectively.

 

R&D investment is essential for the sustainability of the pharmaceutical businesses. However, for segment reporting, the US, Europe, Emerging Markets and Asia Pacific/Japan pharmaceutical operating profits exclude allocations of globally funded R&D as well as central costs, principally corporate functions and unallocated manufacturing costs. GSK's management reporting process allocates intra-Group profit on a product sale to the market in which that sale is recorded, and the profit analyses below have been presented on that basis.

 

The Other trading and unallocated pharmaceuticals segment includes Canada, Puerto Rico, central vaccine tender sales and contract manufacturing sales, together with costs such as vaccines R&D and central manufacturing costs not attributed to other segments.

 

The Pharmaceuticals R&D segment is the responsibility of the Chairman, Research & Development and is therefore being reported as a separate segment.

 

Corporate and other unallocated costs and disposal profits include corporate functions, costs for legal matters, fair value movements on financial instruments and investments and profits on global asset disposals.

 

Turnover by segment

Q1 2010
£m

Q1 2009
(restated)
£m


Growth
CER%

 

US pharmaceuticals

1,909

2,088

(1)

Europe pharmaceuticals

1,893

1,669

16 

Emerging Markets pharmaceuticals

866

639

43 

Asia Pacific/Japan pharmaceuticals

885

619

45 

ViiV Healthcare

373

419

(7)

Other trading and unallocated pharmaceuticals

200

184

4 

6,126

5,618

14 

Consumer Healthcare

1,231

1,151

9 

7,357

6,769

13 

Operating profit by segment

Q1 2010
£m

Q1 2009
(restated)
£m


Growth
CER%

 

US pharmaceuticals

1,295 

1,349

4

Europe pharmaceuticals

1,138 

918

26

Emerging Markets pharmaceuticals

313 

205

62

Asia Pacific/Japan pharmaceuticals

525 

329

63

ViiV Healthcare

212 

291

(23)

Pharmaceuticals R&D

(765)

(885)

(10)

Other trading and unallocated pharmaceuticals

(127)

(154)

59

Pharmaceuticals operating profit

 

 

 

operating profit

 

 

 

 

Operating profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segmental commentary

US pharmaceuticals operating profit increased 4% in the quarter despite a decline in turnover of 1%. This reflects the receipt of a payment from Genentech for the exclusive promotion rights to Boniva for 2010 in the USA. 

 

Europe pharmaceuticals operating profit increased 26% reflecting the turnover increase of 16%, benefiting from strong H1N1 sales in the quarter, and a 6% reduction in SG&A costs.

 

Emerging Markets operating profit grew by 62% on a turnover increase of 43%, reflecting strong H1N1 sales and increased investment in this segment.

 

Asia Pacific/Japan pharmaceuticals operating profit rose by 63%, principally as a result of the significant H1N1 sales in the quarter; turnover increased by 45%.

 

phase IV clinical trial expenditure, the amortisationintegration activities.

 

Other trading and unallocated pharmaceuticals operating loss increased 59%, primarily reflecting higher stock write-offs in the quarter.

 

Pharmaceuticals R&D costs decreased by 10%, reflecting lower intangible asset write-offs of £32 million in the quarter (Q1 2009: £115m) and the phasing of project expenditure.

 

Consumer Healthcare operating profit grew in line with the turnover increase of 9%.

 

Corporate and other unallocated costs increased primarily as a result of the higher legal charges of £210 million in the quarter (Q1 2009: £51m).

 

 

Legal matters

The Group is involved in various legal and administrative proceedings principally product liability, intellectual property, tax, anti-trust and governmental investigations as well as related private litigation, which are more fully described in the 'Legal proceedings' note in the Annual Report 2009.

 

At 31st March 2010, the Group's aggregate provision for legal and other disputes (not including tax matters described under 'Taxation' below) was £2.3 billion.  In respect of a number of legal proceedings in which the Group is involved, it is not possible to make a reasonable estimate of the expected financial effect, if any, that will result from ultimate resolution of the proceedings.  In these cases, the Group may disclose information with respect to the nature and facts of the cases but no provision is typically made.

 

The ultimate liability for legal claims may vary from the amounts provided and is dependent upon the outcome of litigation proceedings, investigations and possible settlement negotiations.  The Group's position could change over time, and there can, therefore, be no assurance that any losses that result from the outcome of any legal proceedings will not exceed the amount of the provisions reported in the Group's financial accounts by a material amount.

 

Arzerra

On 23rd March 2010, Genentech and Biogen Idec filed suit against the Group in the Southern District of California alleging that the Group's sale of Arzerra induces and contributes to infringement of US Patent

No. 7,682,612.  That patent claims the treatment of chronic lymphatic leukemia with an anti-CD-20 monoclonal antibody.  The Group believes that there are numerous defences to the suit and will respond to the complaint.

 

Combivir

In April 2010, the Group and Teva Pharmaceuticals agreed to settle the suit filed by the Group in the US District Court for the District of Delaware alleging that Teva was infringing a patent related to Combivir, which was set to expire in May 2012.  The terms of the settlement are confidential and subject to review by the Federal Trade Commission and Department of Justice.

 

 

.

Taxation

 

 

 

 

 

 

Dividends

Paid/
payable

Pence per
share


£m

9th July 2009

14

701

8th October 2009

14

713

7th January 2010

15

763

8th April 2010

18

920

 

----

 

61

3,097

 

----

 

 

Weighted average number of shares

 

 

 

 

Q1 2010
millions

Q1 2009
millions

2009
millions

 

----

----

----

Weighted average number of shares - basic

5,078

5,064

5,069

Dilutive effect of share options and share awards

46

24

39

 

 

----

----

----

Weighted average number of shares - diluted

5,124

5,088

5,108

 

 

----

----

----

 

 

Net assets

The book value of net assets increased by £684 million from £10,742 million at 31st December 2009 to

£11,426 million at 31st March 2010.  This reflects an increase in net assets arising from the operating activities in the period partially offset by the dividend payment and an increase in the pension deficit.  The increase in the pension deficit arose predominantly from an increase in the estimated long-term UK inflation rate, and a decrease in the rate used to discount UK pension liabilities from 5.70% to 5.50% and the rate used to discount US pension liabilities from 5.75% to 5.60%, partly offset by an increase in asset values.  At 31st March 2010, the net deficit on the Group's pension plans was £1,941 million compared with £1,745 million at 31st December 2009.

 

The carrying value of investments in associates and joint ventures at 31st March 2010 was £965 million, with a market value of £1,894 million.

 

At 31st March 2010, the ESOP Trusts held 108.7 million GSK shares against the future exercise of share options and share awards.  The carrying value of £1,003 million has been deducted from other reserves. The market value of these shares was £1,375 million.

 

GSK did not purchase any shares for cancellation in the period. At 31st March, the company held 474.2 million Treasury shares at a cost of £6,286 million, which has been deducted from retained earnings.

Reconciliation of cash flow to movements in net debt

Q1 2010
£m

Q1 2009
£m

2009
£m

 

(10,173)

 

 

 

1,054 

(87)

 

 

(1,358)

 

102 

 

 

48 

Debt of subsidiary undertakings acquired

 

 

(9)

 

1,041 

(62)

 

 

 

 

 

729 

 

 

 

(9,444)

 

 

 

 

 

Related party transactions

The Group's significant related parties are its joint ventures and associates as disclosed in the Annual Report 2009.

 

There were no material transactions with any of the Group's joint ventures and associates in the period. There were also no material transactions with directors.

 

 

Contingent liabilities

 

 

Exchange rates



Q1 2010

Q1 2009

 2009

 

 

 

Accounting presentation and policies

.

 

Internet

This Announcement and other information about GSK are available on the company's website at: http://www.gsk.com.

 

 

 

 

 

 

 

Additional P&L information

 

Three months ended 31st March 2010

 



Turnover

Cost of sales

SG&A costs

R&D  costs 

Other operating income

Operating profit

Operating margin %




 

US pharmaceuticals

Q1 2010

£m

1,909 

(209)

(522)

-  

117 

1,295 

67.8

Q1 2009 (restated)

£m

2,088 

(197)

(549)

-  

7 

1,349 

64.6

Growth CER

%

(1)

10 

3 

-  

>100 

4 












Europe pharmaceuticals

Q1 2010

£m

1,893 

(396)

(363)

-  

4 

1,138 

60.1

Q1 2009 (restated)

£m

1,669 

(355)

(398)

-  

2 

918 

55.0

Growth CER

%

16 

14 

(6)

-  

100 

26 












Emerging Markets pharmaceuticals

Q1 2010

£m

866 

(317)

(235)

(1) 

- 

313 

36.1

Q1 2009 (restated)

£m

639 

(228)

(206)

(1) 

1 

205 

32.1

Growth CER

%

43 

39 

28 

-  

(100)

62 












Asia Pacific / Japan pharmaceuticals

Q1 2010

£m

885 

(192)

(164)

(6) 

2 

525 

59.3

Q1 2009 (restated)

£m

619 

(139)

(149)

(5) 

3 

329 

53.2

Growth CER

%

45 

37 

9 

40  

(33)

63 












ViiV Healthcare

Q1 2010

£m

373 

(83)

(68)

(7)*

(3)

212 

56.8

Q1 2009 (restated)

£m

419 

(79)

(41)

(5)*

(3)

291 

69.5

Growth CER

%

(7)

6 

71 

40  

(33)

(23)












Pharmaceuticals R&D

Q1 2010

£m

- 

- 

(42)

(725) 

2 

(765)


Q1 2009 (restated)

£m

- 

- 

(48)

(841) 

4 

(885)


Growth CER

%

- 

- 

(6)

(10) 

(25)

(10)












Other trading and unallocated pharmaceuticals

Q1 2010

£m

200 

(221)

(32)

(142) 

68 

(127)


Q1 2009 (restated)

£m

184 

(181)

(64)

(147) 

54 

(154)


Growth CER

%

4 

28 

>100 

(2) 

28 

59 












Total pharmaceuticals

Q1 2010

£m

6,126 

(1,418)

(1,426)

(881) 

190 

2,591 

42.3

Q1 2009 (restated)

£m

5,618 

(1,179)

(1,455)

(999) 

68 

2,053 

36.5

Growth CER

%

14 

22 

11 

(8) 

>100 

27 












Consumer Healthcare

Q1 2010

£m

1,231 

(483)

(515)

(37) 

2 

198 

16.1

Q1 2009 (restated)

£m

1,151 

(444)

(490)

(33) 

- 

184 

16.0

Growth CER

%

9 

11 

8 

18  

- 

9 












Corporate and other unallocated costs

Q1 2010

£m

- 

(23)

(357)

(21) 

7 

(394)


Q1 2009 (restated)

£m

- 

(21)

(184)

(42) 

(14)

(261)


Growth CER

%

- 

10

>100 

(48) 

>100 

60 












Results before major restructuring 

 

Q1 2010

£m

7,357 

(1,924)

(2,298)

(939) 

199 

2,395 

32.6

Q1 2009 (restated)

£m

6,769 

(1,644)

(2,129)

(1,074) 

54 

1,976 

29.2

Growth CER

%

13 

19 

18 

(9) 

>100 

21 












* Note: This excludes HIV discovery research (pre-Phase IIb) which is conducted by GSK and Pfizer and R&D expenditure related to the Shionogi JV and Phase IV clinical expenditure which are reported within the ViiV Healthcare OOI and SG&A lines respectively.

 

 

 

The following table provides additional financial analysis for w and w which are not segments for financial reporting purposes and are managed within the geographical pharmaceutical segments.  Consequently these results are included within the financial information of the relevant geographical pharmaceuticals segments as reported to the CEO and presented in the tables on pages 16 to 17.

 

 

 

Three months ended 31st March 2010

 

Turnover 

Cost of sales

SG&A costs

R&D costs

Other operating income

Operating profit

Operating margin %

 

Worldwide vaccines

Q1 2010

£m

1,411 

(389)

(170)

(117)

28

763

54.1

Q1 2009 (restated)

£m

625 

(201)

(150)

(118)

24

180

28.8

Growth CER

%

>100 

98 

18 

2 

17

>100












Worldwide dermatologicals

Q1 2010

£m

265 

(53)

(78)

(8)

1

127

47.9

Q1 2009 (restated)

£m

112 

(25)

(3)

- 

-

84

75.0

Growth CER

%

>100 

>100 

>100 

- 

-

55












All other pharmaceuticals

Q1 2010

£m

4,450 

(976)

(1,178)

(756)

161

1,701

38.2


Q1 2009 (restated)

£m

4,881 

(953)

(1,302)

(881)

44

1,789

36.7


Growth CER

%

(5)

4 

4 

(11)

>100

(5)












Total pharmaceuticals

Q1 2010

£m

6,126 

(1,418)

(1,426)

(881)

190

2,591

42.3


Q1 2009 (restated)

£m

5,618 

(1,179)

(1,455)

(999)

68

2,053

36.5


Growth CER

%

14 

22 

11 

(8)

>100

27


 

Independent review report to GlaxoSmithKline plc

 

Introduction

We have been engaged by the company to review the condensed financial information in the Results Announcement for the three months ended 31st March 2010 which comprises the income statement, statement of comprehensive income, balance sheet, cash flow statement, statement of changes in equity and related notes (excluding the late-stage pharmaceuticals and vaccines pipeline table and the additional P&L information).  We have read the other information contained in the Results Announcement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed financial information.

 

Directors' responsibilities

The Results Announcement is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the Results Announcement in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

 

The annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union.  The condensed financial information included in the Results Announcement for the three months ended 31 March 2010 has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

 

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed financial information in the Results Announcement based on our review.  This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose.  We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed financial information in the Results Announcement for the three months ended 31st March 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

 

 

PricewaterhouseCoopers LLP

Chartered Accountants

28th April 2010

London

 

Notes:

 

(a)

The maintenance and integrity of the GlaxoSmithKline plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the condensed financial information since it was initially presented on the website.

 

 

(b)

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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