REG - GlaxoSmithKline PLC - GSK reporting changes - product sales and IFRS 16
RNS Number : 3811UGlaxoSmithKline PLC28 March 2019
28 March 2019, London, U.K.
GSK publishes product sales reporting changes and the impact of IFRS 16 'Leases'
GSK keeps its financial reporting under regular review to ensure that it remains current and in line with both the latest regulatory requirements and developing best practice within the Pharmaceutical industry.
Respiratory category for reported sales to be updated
Following the approval of a generic alternative to Advair in the US, GSK has reviewed the presentation of its respiratory product sales and will report the Ellipta products portfolio and Nucala under the "Respiratory" category and all other respiratory products under "Established Pharmaceuticals" (disclosed separately as an Established Respiratory section) with effect from the first quarter 2019 Results Announcement. This reflects the different stages of the product life-cycle of the various respiratory products and ensures consistency of reporting for the sales of products with similar levels of strategic focus.
The revised Pharmaceutical turnover tables below set out the revised format for reporting Pharmaceutical product sales that will be used from the first quarter 2019 results, as applied to the 2018 reported Pharmaceutical product sales.
New accounting requirements - IFRS 16 "Leases"
IFRS 16 "Leases" was issued in January 2016 and has been implemented by the Group from 1 January 2019. The Standard replaces IAS 17 "Leases" and will require lease liabilities and 'right of use' assets to be recognised on the balance sheet for almost all leases. This has resulted in a significant increase in both assets and liabilities recognised. The costs of operating leases previously included within operating costs will be split and the financing element of the charge will be reported within finance expense.
GSK has implemented IFRS 16 by applying the modified retrospective approach. For larger leases, the right of use asset at 1 January 2019 has been calculated based on the original lease inception date and for smaller leases the right of use asset has been set equal to the lease liability, adjusted for any prepaid or accrued lease payments, onerous lease provisions and business combination fair value adjustments.
The table overleaf shows the amount of adjustment for each financial statement line item affected by the application of IFRS 16 at 1 January 2019.
As previously reported
IFRS 16 adjustments
As adjusted
£m
£m
£m
Property, plant and equipment
11,058
(98)
10,960
Right of use assets
-
1,071
1,071
Other non-current assets
1,576
(11)
1,565
Trade and other receivables
6,423
3
6,426
Deferred tax assets
3,887
39
3,926
Short-term borrowings
(5,793)
(229)
(6,022)
Long-term borrowings
(20,271)
(1,074)
(21,345)
Trade and other payables
(14,037)
10
(14,027)
Current and non-current provisions
(1,423)
35
(1,388)
Other non-current liabilities
(938)
160
(778)
Deferred tax liabilities
(1,156)
1
(1,155)
Total effect on net assets
3,672
(93)
3,579
Retained earnings
(2,137)
(93)
(2,230)
Total effect on equity
3,672
(93)
3,579
The adoption of IFRS 16 will have no impact on overall cash flows for the Group although the presentation of the lease payments in the cash flow statement will change resulting in an increase to the net cash inflow from operating activities, and hence free cash flow, and a corresponding increase in the net cash outflow from financing items (split between interest paid and net repayment of obligations under finance leases).
The IFRS 16 impact tables below set out, on a pro forma basis, the impact of IFRS 16 on the Total and Adjusted results for the quarters of 2018 assuming the same transition adjustments were made as at 1 January 2018 instead of 1 January 2019. The impact of the change would have been to increase the operating profit on a Total basis by £18 million and on an Adjusted basis by £23 million in 2018 and to increase the net finance expense by £28 million on a Total basis and £30 million on an Adjusted basis.
The impact of IFRS 16 for the full years 2019 and 2020 is expected to be at a similar level to 2018, and so this change is not expected to affect the Group's previously announced guidance related to its expectations for Adjusted EPS growth in CER terms for 2019 or the Group's medium-term outlook for Adjusted EPS growth in CER terms for the five year period 2016-2020.
An Excel version of this data is available on www.gsk.com.
GSK - 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. For further information please visit www.gsk.com
Analyst/Investor enquiries:
Sarah Elton-Farr
+44 (0) 20 8047 5194
(London)
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(London)
Jeff McLaughlin
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(Philadelphia)
This Announcement does not constitute statutory accounts of the Group within the meaning of sections 434(3) and 435(3) of the Companies Act 2006. The information for 2018 has been derived from the full Group accounts published in the Annual Report 2018.
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.
Assumptions related to 2019 guidance and 2016-2020 outlook
In outlining the expectations for 2019 and the five-year period 2016-2020, the Group has made certain assumptions about the healthcare sector, the different markets in which the Group operates and the delivery of revenues and financial benefits from its current portfolio, pipeline and restructuring programmes.
For the Group specifically, over the period to 2020, GSK expects further declines in sales of Seretide/Advair. The introduction of a generic alternative to Advair in the US has been factored into the Group's assessment of its future performance. The Group assumes no premature loss of exclusivity for other key products over the period.
The assumptions for the Group's revenue, earnings and dividend expectations assume no material interruptions to supply of the Group's products, no material mergers, acquisitions or disposals, except for the acquisition of Tesaro, the proposed divestment of Horlicks and other Consumer Healthcare products to Unilever and the proposed formation of a new Consumer Healthcare Joint Venture with Pfizer, all announced in December 2018, no material litigation or investigation costs for the Company (save for those that are already recognised or for which provisions have been made), no share repurchases by the Company, and no change in the Group's shareholdings in ViiV Healthcare. The assumptions also assume no material changes in the macro-economic and healthcare environment. The 2019 guidance and 2016-2020 outlook have factored in all divestments and product exits since 2015, including the divestment and exit of more than 130 non-core tail brands (£0.5 billion in annual sales) as announced on 26 July 2017 and the product divestments planned in connection with the proposed Consumer Healthcare transaction with Pfizer.
The Group's expectations assume successful delivery of the Group's integration and restructuring plans over the period 2016-2020, including the extension and enhancement to the combined programme announced on 26 July 2017 as well as the new major restructuring plan announced on 25 July 2018.
They also assume that the proposed Consumer Healthcare nutrition disposal closes by the end of 2019 and the proposed Consumer Healthcare Joint Venture with Pfizer closes during H2 2019 and that the integration and investment programmes following the Tesaro acquisition and the proposed Consumer Healthcare Joint Venture with Pfizer over this period are delivered successfully.
Material costs for investment in new product launches and R&D have been factored into the expectations given. Given the potential development options in the Group's pipeline, the outlook may be affected by additional data-driven R&D investment decisions. The expectations are given on a constant currency basis (2016-2020 outlook at 2015 CER).
Subject to material changes in the product mix, the Group's medium-term effective tax rate is expected to be around 19% of Adjusted profits. This incorporates management's best estimates of the impact of US tax reform on the Group based on the information currently available. As more information on the detailed application of the US Tax Cuts and Jobs Act becomes available, the assumptions underlying these estimates could change with consequent adjustments to the charges taken that could have a material impact on the results of the Group.
Cautionary statement regarding forward-looking statements
The Group's reports filed with or furnished to the US Securities and Exchange Commission (SEC), including this document and written information released, or oral statements made, to the public in the future by or on behalf of the Group, 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 to historical or current facts. They use words such as 'anticipate', 'estimate', 'expect', 'intend', 'will', 'project', 'plan', 'believe' 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 approvals, future performance or results of current and anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, and financial results. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure and Transparency Rules 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. The reader should, however, consult any additional disclosures that the Group may make in any documents that it publishes and/or files with the SEC. All readers, wherever located, should take note of these disclosures. Accordingly, no assurance can be given that any particular expectation will be met and shareholders and investors are cautioned not to place undue reliance on the forward-looking statements.
Forward-looking statements are subject to assumptions, inherent risks and uncertainties, many of which relate to factors that are beyond the Group's control or precise estimate. The Group cautions investors that a number of important factors, including those in this document, could cause actual results to differ materially from those expressed or implied in any forward-looking statement. Such factors include, but are not limited to, those discussed under 'Principal risks and uncertainties' on pages 257-266 of the GSK 2018 Annual Report. Any forward-looking statements made by or on behalf of the Group speak only as of the date they are made and are based upon the knowledge of and information available to the Directors on the date of this report.
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TW8 9GS
Revised format for reporting Pharmaceuticals product sales
The revised format for the reporting of Pharmaceutical product sales applied to the 2018 Pharmaceutical sales is as follows:
Pharmaceuticals turnover - year ended 31 December 2018
Total
US
Europe
International
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
Growth
Growth
Growth
Growth
-----------------------
-----------------------
-----------------------
-----------------------
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Respiratory
2,612
35
38
1,586
28
31
609
55
54
417
40
45
Ellipta products
2,049
29
32
1,245
24
27
457
42
41
347
33
38
Anoro Ellipta
476
39
42
318
36
39
101
46
45
57
46
54
Arnuity Ellipta
44
26
29
39
22
25
-
-
-
5
67
67
Incruse Ellipta
284
41
44
186
39
42
74
45
45
24
50
56
Relvar/Breo Ellipta
1,089
8
10
581
(3)
(1)
253
25
24
255
26
31
Trelegy Ellipta
156
>100
>100
121
>100
>100
29
>100
>100
6
-
-
Nucala/Mepolizumab
563
64
66
341
44
48
152
>100
>100
70
84
89
HIV
4,722
9
11
2,913
8
10
1,194
7
6
615
14
20
Dolutegravir products
4,420
14
16
2,830
11
13
1,091
18
17
499
28
35
Tivicay
1,639
17
19
1,036
12
15
377
20
18
226
37
47
Triumeq
2,648
8
9
1,670
2
5
706
17
15
272
21
25
Juluca
133
>100
>100
124
>100
>100
8
-
-
1
-
-
Epzicom/Kivexa
117
(50)
(48)
7
(74)
(74)
44
(61)
(61)
66
(28)
(24)
Selzentry
115
(10)
(9)
58
(12)
(11)
35
(17)
(17)
22
10
15
Other
70
(41)
(40)
18
(59)
(59)
24
(35)
(38)
28
(26)
(21)
Immuno-inflammation
472
25
28
420
24
27
36
33
33
16
45
64
Benlysta
473
26
29
420
24
27
37
37
33
16
60
80
Oncology
-
-
-
-
-
-
-
-
-
-
-
-
Established
Pharmaceuticals
9,463
(11)
(8)
2,534
(23)
(21)
2,233
(9)
(10)
4,696
(4)
1
Established Respiratory
4,316
(15)
(13)
1,782
(23)
(21)
924
(13)
(14)
1,610
(4)
-
Seretide/Advair
2,422
(23)
(21)
1,097
(32)
(30)
599
(19)
(20)
726
(7)
(4)
Flixotide/Flovent
595
-
3
333
3
6
93
(2)
(3)
169
(5)
1
Ventolin
737
(4)
(1)
352
(7)
(5)
130
(2)
(2)
255
-
7
Avamys/Veramyst
300
7
10
-
-
-
74
(3)
(4)
226
11
16
Other Respiratory
262
(9)
(7)
-
-
-
28
4
-
234
(9)
(7)
Dermatology
435
(4)
-
3
(57)
(57)
161
(1)
(2)
271
(5)
2
Augmentin
570
(3)
2
-
-
-
181
(1)
(2)
389
(4)
3
Avodart
572
(7)
(5)
12
(20)
(20)
240
(19)
(20)
320
6
11
Imigran/Imitrex
141
(16)
(16)
58
(25)
(23)
57
(12)
(14)
26
-
-
Lamictal
617
(5)
(3)
310
(7)
(5)
113
6
5
194
(8)
(4)
Seroxat/Paxil
170
(8)
(5)
-
-
-
39
-
-
131
(10)
(7)
Valtrex
123
(4)
(1)
21
5
5
30
3
3
72
(9)
(4)
Other
2,519
(6)
(9)
348
(34)
(32)
488
(3)
(4)
1,683
(4)
1
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Pharmaceuticals
17,269
-
2
7,453
(2)
1
4,072
2
1
5,744
-
5
--------
--------
--------
--------
----------
--------
--------
---------
--------
--------
---------
--------
Pharmaceuticals turnover - three months ended 31 December 2018
Total
US
Europe
International
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
Growth
Growth
Growth
Growth
-----------------------
-----------------------
-----------------------
-----------------------
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Respiratory
827
38
34
520
32
27
179
58
57
128
36
35
Ellipta products
654
36
33
413
33
28
135
52
51
106
33
31
Anoro Ellipta
144
32
28
98
27
21
29
45
45
17
42
50
Arnuity Ellipta
13
8
-
11
10
10
-
-
-
2
-
(50)
Incruse Ellipta
87
43
38
60
46
39
20
33
33
7
40
40
Relvar/Breo Ellipta
333
13
9
186
3
(2)
71
31
28
76
25
26
Trelegy Ellipta
77
>100
>100
58
>100
>100
15
>100
>100
4
-
-
Nucala/Mepolizumab
173
43
38
107
29
23
44
83
79
22
57
57
HIV
1,276
10
6
786
10
3
317
9
7
173
15
18
Dolutegravir products
1,205
14
9
766
11
5
291
15
13
148
28
29
Tivicay
452
14
10
281
10
3
104
20
18
67
24
28
Triumeq
691
5
1
429
-
(6)
182
10
8
80
29
29
Juluca
62
>100
>100
56
>100
>100
5
-
-
1
-
-
Epzicom/Kivexa
30
(29)
(31)
4
-
(25)
11
(35)
(35)
15
(29)
(29)
Selzentry
31
3
(3)
16
-
(13)
9
(10)
(10)
6
50
50
Other
10
(63)
(52)
-
-
-
6
(50)
(50)
4
(56)
(33)
Immuno-inflammation
136
40
34
121
39
31
10
43
43
5
67
>100
Benlysta
138
42
34
121
39
31
10
43
43
7
>100
>100
Oncology
-
-
-
-
-
-
-
-
-
-
-
-
Established
Pharmaceuticals
2,571
(4)
(5)
692
(17)
(22)
604
(3)
(4)
1,275
4
6
Established Respiratory
1,164
(10)
(12)
503
(18)
(23)
236
(12)
(13)
425
3
4
Seretide/Advair
647
(18)
(20)
299
(27)
(31)
150
(18)
(20)
198
1
2
Flixotide/Flovent
166
2
-
94
3
(2)
26
-
(4)
46
2
7
Ventolin
215
-
(1)
110
(1)
(6)
36
-
(3)
69
1
7
Avamys/Veramyst
73
12
12
-
-
-
17
-
-
56
17
17
Other Respiratory
63
(5)
(5)
-
-
-
7
17
33
56
(2)
(4)
Dermatology
115
(1)
2
1
(80)
(80)
43
8
5
71
-
6
Augmentin
146
2
3
-
-
-
49
7
7
97
-
2
Avodart
149
-
(1)
3
-
(67)
60
(6)
(8)
86
5
7
Imigran/Imitrex
40
11
8
19
27
27
14
(7)
(13)
7
17
17
Lamictal
159
(5)
(8)
83
(2)
(9)
30
15
15
46
(19)
(18)
Seroxat/Paxil
46
(2)
(4)
-
-
-
10
-
-
36
(3)
(5)
Valtrex
33
6
6
7
75
50
7
17
17
19
(10)
(5)
Other
719
3
3
76
(33)
(34)
155
5
3
488
11
13
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Pharmaceuticals
4,810
6
4
2,119
4
(1)
1,110
7
6
1,581
7
9
--------
--------
--------
--------
----------
--------
--------
---------
--------
--------
---------
--------
Pharmaceuticals turnover - nine months ended 30 September 2018
Total
US
Europe
International
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
Growth
Growth
Growth
Growth
-----------------------
-----------------------
-----------------------
-----------------------
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Respiratory
1,785
34
40
1,066
26
33
430
54
53
289
42
50
Ellipta products
1,395
26
31
832
20
27
322
38
37
241
34
42
Anoro Ellipta
332
42
48
220
40
48
72
47
45
40
48
56
Arnuity Ellipta
31
35
43
28
27
32
-
-
-
3
>100
>100
Incruse Ellipta
197
41
46
126
35
43
54
50
50
17
55
64
Relvar/Breo Ellipta
756
6
11
395
(6)
(1)
182
23
22
179
27
33
Trelegy Ellipta
79
-
-
63
-
-
14
-
-
2
-
-
Nucala/Mepolizumab
390
75
81
234
53
61
108
>100
>100
48
100
>100
HIV
3,446
8
12
2,127
7
13
877
7
6
442
14
21
Dolutegravir products
3,215
14
19
2,064
10
16
800
20
19
351
29
37
Tivicay
1,187
18
23
755
13
19
273
20
18
159
43
56
Triumeq
1,957
8
12
1,241
3
9
524
19
18
192
19
24
Juluca
71
-
-
68
-
-
3
-
-
-
-
-
Epzicom/Kivexa
87
(54)
(52)
3
(87)
(83)
33
(66)
(66)
51
(28)
(23)
Selzentry
84
(14)
(10)
42
(16)
(10)
26
(19)
(19)
16
-
6
Other
60
(35)
(37)
18
(53)
(53)
18
(28)
(32)
24
(17)
(17)
Immuno-inflammation
336
20
26
299
19
25
26
30
30
11
37
50
Benlysta
335
21
27
299
19
25
27
35
30
9
29
71
Oncology
-
-
-
-
-
-
-
-
-
-
-
-
Established
Pharmaceuticals
6,892
(13)
(9)
1,842
(25)
(21)
1,629
(11)
(12)
3,421
(6)
-
Established Respiratory
3,152
(16)
(13)
1,279
(25)
(21)
688
(14)
(15)
1,185
(6)
(1)
Seretide/Advair
1,775
(24)
(21)
798
(34)
(30)
449
(19)
(20)
528
(10)
(5)
Flixotide/Flovent
429
(1)
4
239
3
9
67
(3)
(3)
123
(8)
(2)
Ventolin
522
(5)
-
242
(10)
(5)
94
(2)
(2)
186
(1)
7
Avamys/Veramyst
227
5
9
-
-
-
57
(3)
(5)
170
9
15
Other Respiratory
199
(10)
(8)
-
-
-
21
-
(10)
178
(11)
(7)
Dermatology
320
(6)
(1)
2
-
-
118
(3)
(4)
200
(7)
1
Augmentin
424
(5)
1
-
-
-
132
(3)
(4)
292
(5)
3
Avodart
423
(9)
(6)
9
(25)
(8)
180
(23)
(24)
234
7
12
Imigran/Imitrex
101
(23)
(23)
39
(37)
(35)
43
(14)
(14)
19
(5)
(5)
Lamictal
458
(5)
(1)
227
(8)
(3)
83
2
1
148
(4)
1
Seroxat/Paxil
124
(9)
(6)
-
-
-
29
-
-
95
(12)
(7)
Valtrex
90
(7)
(3)
14
(12)
(6)
23
-
-
53
(9)
(3)
Other
1,800
(13)
(9)
272
(34)
(31)
333
(6)
(7)
1,195
(8)
(3)
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Pharmaceuticals
12,459
(2)
2
5,334
(4)
2
2,962
1
(1)
4,163
(2)
4
--------
--------
--------
--------
----------
--------
--------
---------
--------
--------
---------
--------
Pharmaceuticals turnover - three months ended 30 September 2018
Total
US
Europe
International
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
Growth
Growth
Growth
Growth
-----------------------
-----------------------
-----------------------
-----------------------
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Respiratory
645
39
40
395
36
37
151
51
50
99
34
39
Ellipta products
500
34
35
308
34
36
110
37
36
82
28
33
Anoro Ellipta
115
34
34
77
33
34
24
33
33
14
40
30
Arnuity Ellipta
10
43
43
9
50
50
-
-
-
1
-
-
Incruse Ellipta
75
34
38
51
31
33
18
38
38
6
50
75
Relvar/Breo Ellipta
258
15
16
139
9
11
59
20
20
60
22
24
Trelegy Ellipta
42
-
-
32
-
-
9
-
-
1
-
-
Nucala/Mepolizumab
145
59
62
87
43
44
41
>100
>100
17
70
80
HIV
1,209
11
12
754
11
12
290
2
1
165
27
34
Dolutegravir products
1,138
16
17
733
13
14
267
12
11
138
42
51
Tivicay
432
19
21
271
11
12
93
16
15
68
70
85
Triumeq
669
8
9
427
5
6
172
9
8
70
23
26
Juluca
37
-
-
35
-
-
2
-
-
-
-
-
Epzicom/Kivexa
24
(51)
(47)
1
(50)
-
9
(65)
(65)
14
(33)
(29)
Selzentry
26
(16)
(13)
14
(18)
(18)
8
(27)
(27)
4
33
67
Other
21
(30)
(37)
6
(54)
(54)
6
(25)
(37)
9
-
(11)
Immuno-inflammation
122
28
29
108
27
28
9
29
29
5
67
67
Benlysta
121
29
31
108
27
29
10
43
29
3
50
100
Oncology
-
-
-
-
-
-
-
-
-
-
-
-
Established
Pharmaceuticals
2,245
(11)
(9)
636
(18)
(17)
501
(10)
(11)
1,108
(8)
(4)
Established Respiratory
1,021
(11)
(9)
451
(14)
(13)
200
(15)
(15)
370
(5)
(1)
Seretide/Advair
619
(17)
(15)
309
(20)
(19)
132
(20)
(20)
178
(7)
(2)
Flixotide/Flovent
117
(6)
(6)
59
(9)
(11)
19
6
6
39
(7)
(2)
Ventolin
172
8
12
83
26
29
29
(6)
(3)
60
(3)
2
Avamys/Veramyst
60
-
2
-
-
-
15
-
(7)
45
5
9
Other Respiratory
53
(10)
(10)
-
-
-
5
(17)
(33)
48
(8)
(4)
Dermatology
109
(5)
-
1
(50)
(50)
40
-
-
68
(7)
1
Augmentin
133
(10)
(5)
-
-
-
40
(2)
(2)
93
(13)
(7)
Avodart
144
-
1
3
-
33
59
(11)
(12)
82
9
12
Imigran/Imitrex
33
(13)
(13)
13
(19)
(19)
13
(19)
(19)
7
17
17
Lamictal
148
(11)
(10)
74
(14)
(13)
30
11
11
44
(19)
(17)
Seroxat/Paxil
42
(9)
(4)
-
-
-
9
(10)
-
33
(8)
(6)
Valtrex
32
(6)
(3)
6
(14)
(14)
8
-
-
18
(5)
-
Other
583
(16)
(14)
88
(36)
(37)
102
(11)
(12)
393
(12)
(8)
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Pharmaceuticals
4,221
1
3
1,893
3
4
951
1
-
1,377
(3)
2
--------
--------
--------
--------
----------
--------
--------
---------
--------
--------
---------
--------
Pharmaceuticals turnover - six months ended 30 June 2018
Total
US
Europe
International
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
Growth
Growth
Growth
Growth
-----------------------
-----------------------
-----------------------
-----------------------
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Respiratory
1,140
32
39
671
21
30
279
56
54
190
46
55
Ellipta products
895
22
29
524
13
22
212
39
37
159
37
47
Anoro Ellipta
217
48
56
143
44
56
48
55
52
26
53
71
Arnuity Ellipta
21
31
44
19
19
25
-
-
-
2
>100
>100
Incruse Ellipta
122
45
52
75
39
50
36
57
57
11
57
57
Relvar/Breo Ellipta
498
3
8
256
(13)
(6)
123
24
23
119
29
37
Trelegy Ellipta
37
-
-
31
-
-
5
-
-
1
-
-
Nucala/Mepolizumab
245
86
95
147
60
73
67
>100
>100
31
>100
>100
HIV
2,237
7
12
1,373
5
14
587
9
8
277
7
14
Dolutegravir products
2,077
14
20
1,331
9
17
533
24
22
213
21
30
Tivicay
755
18
25
484
14
24
180
22
20
91
28
39
Triumeq
1,288
9
14
814
2
10
352
25
23
122
16
23
Juluca
34
-
-
33
-
-
1
-
-
-
-
-
Epzicom/Kivexa
63
(56)
(54)
2
(90)
(90)
24
(66)
(66)
37
(26)
(20)
Selzentry
58
(13)
(9)
28
(15)
(6)
18
(14)
(14)
12
(8)
(8)
Other
39
(37)
(37)
12
(52)
(56)
12
(29)
(29)
15
(25)
(20)
Immuno-inflammation
214
16
24
191
14
23
17
31
31
6
20
40
Benlysta
214
16
25
191
15
23
17
31
31
6
20
60
Oncology
-
-
-
-
-
-
-
-
-
-
-
-
Established
Pharmaceuticals
4,647
(14)
(10)
1,206
(28)
(23)
1,128
(11)
(12)
2,313
(5)
1
Established Respiratory
2,131
(19)
(14)
828
(30)
(24)
488
(13)
(14)
815
(7)
(1)
Seretide/Advair
1,156
(28)
(24)
489
(40)
(35)
317
(18)
(19)
350
(12)
(7)
Flixotide/Flovent
312
1
7
180
8
16
48
(6)
(6)
84
(8)
(1)
Ventolin
350
(11)
(5)
159
(22)
(16)
65
-
(2)
126
1
10
Avamys/Veramyst
167
7
12
-
-
-
42
(5)
(5)
125
11
18
Other Respiratory
146
(10)
(7)
-
-
-
16
7
-
130
(13)
(9)
Dermatology
211
(6)
(1)
1
-
-
78
(5)
(6)
132
(7)
1
Augmentin
291
(2)
4
-
-
-
92
(3)
(5)
199
(1)
8
Avodart
279
(13)
(10)
6
(33)
(22)
121
(28)
(28)
152
6
12
Imigran/Imitrex
68
(28)
(27)
26
(43)
(41)
30
(12)
(12)
12
(14)
(14)
Lamictal
310
(2)
4
153
(5)
2
53
(2)
(4)
104
4
10
Seroxat/Paxil
82
(10)
(7)
-
-
-
20
5
-
62
(14)
(8)
Valtrex
58
(8)
(3)
8
(11)
-
15
-
-
35
(10)
(5)
Other
1,217
(11)
(7)
184
(33)
(28)
231
(4)
(5)
802
(7)
-
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Pharmaceuticals
8,238
(4)
1
3,441
(7)
-
2,011
-
(1)
2,786
(2)
5
--------
--------
--------
--------
----------
--------
--------
---------
--------
--------
---------
--------
Pharmaceuticals turnover - three months ended 30 June 2018
Total
US
Europe
International
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
Growth
Growth
Growth
Growth
-----------------------
-----------------------
-----------------------
-----------------------
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Respiratory
650
31
37
405
21
28
145
53
53
100
47
59
Ellipta products
509
20
26
317
12
18
109
36
36
83
38
50
Anoro Ellipta
120
41
48
83
41
47
24
41
35
13
44
78
Arnuity Ellipta
10
25
38
9
13
13
-
-
-
1
-
-
Incruse Ellipta
74
48
54
48
41
50
20
54
54
6
100
100
Relvar/Breo Ellipta
279
(1)
4
156
(15)
(10)
61
22
24
62
29
35
Trelegy Ellipta
26
-
-
21
-
-
4
-
-
1
-
-
Nucala/Mepolizumab
141
93
>100
88
76
86
36
>100
>100
17
>100
>100
HIV
1,189
7
11
744
7
13
288
3
4
157
11
16
Dolutegravir products
1,113
13
18
727
10
16
263
16
17
123
24
31
Tivicay
407
20
25
256
15
21
92
18
19
59
51
62
Triumeq
682
5
9
448
2
7
170
15
16
64
7
12
Juluca
24
-
-
23
-
-
1
-
-
-
-
-
Epzicom/Kivexa
26
(59)
(56)
(1)
>(100)
>(100)
10
(69)
(69)
17
(29)
(21)
Selzentry
29
-
-
13
-
8
9
(18)
(18)
7
40
20
Other
21
(43)
(46)
5
(55)
(73)
6
(45)
(45)
10
(31)
(23)
Immuno-inflammation
114
23
29
102
23
30
9
29
29
3
-
-
Benlysta
114
23
29
102
23
29
8
14
29
4
33
33
Oncology
-
-
-
-
-
-
-
-
-
-
-
-
Established
Pharmaceuticals
2,276
(14)
(11)
620
(28)
(25)
542
(11)
(11)
1,114
(5)
-
Established Respiratory
1,046
(20)
(17)
432
(32)
(29)
234
(12)
(12)
380
(6)
(2)
Seretide/Advair
590
(30)
(28)
260
(45)
(43)
151
(17)
(17)
179
(6)
(2)
Flixotide/Flovent
154
6
12
94
21
27
21
(9)
(4)
39
(11)
(7)
Ventolin
170
(5)
-
78
(9)
(6)
31
3
3
61
(3)
6
Avamys/Veramyst
69
6
11
-
-
-
22
(4)
-
47
9
14
Other Respiratory
63
(6)
(10)
-
-
-
9
29
-
54
(14)
(17)
Dermatology
104
(6)
(2)
-
-
-
39
(5)
(5)
65
(7)
-
Augmentin
127
(10)
(5)
-
-
-
37
(12)
(12)
90
(9)
(2)
Avodart
138
(14)
(11)
3
(25)
(25)
57
(32)
(32)
78
8
14
Imigran/Imitrex
36
(12)
(12)
14
(13)
(12)
15
(17)
(17)
7
-
-
Lamictal
164
10
13
82
14
19
27
(4)
(7)
55
12
16
Seroxat/Paxil
42
(9)
(9)
-
-
-
10
-
(10)
32
(11)
(8)
Valtrex
30
(6)
(3)
5
-
-
8
-
-
17
(11)
(5)
Other
589
(12)
(7)
84
(35)
(34)
115
-
3
390
(8)
(2)
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Pharmaceuticals
4,229
(3)
1
1,871
(5)
-
984
(1)
(1)
1,374
(1)
4
--------
--------
--------
--------
----------
--------
--------
---------
--------
--------
---------
--------
Pharmaceuticals turnover - three months ended 31 March 2018
Total
US
Europe
International
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
Growth
Growth
Growth
Growth
-----------------------
-----------------------
-----------------------
-----------------------
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
£m
£%
CER%
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Respiratory
490
34
42
266
20
34
134
60
56
90
45
52
Ellipta products
386
25
34
207
16
29
103
41
38
76
36
43
Anoro Ellipta
97
56
68
60
50
67
24
71
71
13
62
62
Arnuity Ellipta
11
37
50
10
25
37
-
-
-
1
>100
>100
Incruse Ellipta
48
41
50
27
35
50
16
60
60
5
25
25
Relvar/Breo Ellipta
219
7
14
100
(10)
1
62
27
22
57
30
39
Trelegy Ellipta
11
-
-
10
-
-
1
-
-
-
-
-
Nucala/Mepolizumab
104
76
86
59
40
57
31
>100
>100
14
>100
>100
HIV
1,048
6
14
629
3
15
299
15
12
120
3
11
Dolutegravir products
964
15
23
604
8
20
270
32
28
90
17
27
Tivicay
348
15
24
228
14
27
88
26
21
32
-
13
Triumeq
606
12
20
366
2
13
182
36
32
58
29
38
Juluca
10
-
-
10
-
-
-
-
-
-
-
-
Epzicom/Kivexa
37
(53)
(52)
3
(79)
(79)
14
(64)
(64)
20
(23)
(19)
Selzentry
29
(24)
(16)
15
(25)
(15)
9
(10)
(10)
5
(37)
(25)
Other
18
(30)
(26)
7
(50)
(43)
6
-
-
5
(14)
(14)
Immuno-inflammation
100
9
20
89
6
17
8
33
33
3
50
100
Benlysta
100
10
21
89
7
18
9
50
33
2
-
>100
Oncology
-
-
-
-
-
-
-
-
-
-
-
-
Established
Pharmaceuticals
2,371
(14)
(8)
586
(28)
(21)
586
(11)
(13)
1,199
(5)
2
Established Respiratory
1,085
(18)
(12)
396
(27)
(20)
254
(15)
(17)
435
(8)
-
Seretide/Advair
566
(25)
(20)
229
(32)
(25)
166
(19)
(21)
171
(17)
(12)
Flixotide/Flovent
158
(4)
4
86
(3)
7
27
(4)
(7)
45
(4)
4
Ventolin
180
(16)
(9)
81
(31)
(23)
34
(3)
(6)
65
5
15
Avamys/Veramyst
98
8
13
-
-
-
20
(5)
(10)
78
11
20
Other Respiratory
83
(13)
(4)
-
-
-
7
(12)
-
76
(12)
(2)
Dermatology
107
(5)
-
1
>100
>100
39
(5)
(7)
67
(7)
3
Augmentin
164
6
12
-
-
-
55
4
-
109
7
19
Avodart
141
(12)
(9)
3
(40)
(20)
64
(23)
(24)
74
3
10
Imigran/Imitrex
32
(40)
(38)
12
(60)
(57)
15
(6)
(6)
5
(29)
(29)
Lamictal
146
(12)
(5)
71
(20)
(11)
26
-
-
49
(4)
4
Seroxat/Paxil
40
(11)
(4)
-
-
-
10
11
11
30
(17)
(8)
Valtrex
28
(10)
(3)
3
(25)
-
7
-
-
18
(10)
(5)
Other
628
(11)
(6)
100
(31)
(24)
116
(8)
(12)
412
(6)
1
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
--------
Pharmaceuticals
4,009
(4)
2
1,570
(9)
1
1,027
2
(1)
1,412
(3)
5
--------
--------
--------
--------
----------
--------
--------
---------
--------
--------
---------
--------
Pro forma IFRS 16 impact on 2018 total and adjusted income statement
As stated above, GSK has implemented IFRS 16 by applying the modified retrospective approach with an effective transition date of 1 January 2019. As a result, the reported results for 2018 on both a Total and Adjusted basis are not required to be restated for the impact of the adoption of IFRS 16. The information in the tables below is therefore presented on a pro forma basis as indicative of the impact that IFRS 16 would have had on the Total and Adjusted income statements of the Group in 2018.
Total income statement
2018
Quarter 1
Quarter 2
6 months
Quarter 3
9 months
Quarter 4
Full Year
£m
£m
£m
£m
£m
£m
£m
Turnover
7,222
7,310
14,532
8,092
22,624
8,197
30,821
Cost of sales
(2,390)
(2,311)
(4,701)
(2,637)
(7,338)
(2,906)
(10,244)
Gross profit
4,832
4,999
9,831
5,455
15,286
5,291
20,577
Selling, general and administration
(2,304)
(2,452)
(4,756)
(2,524)
(7,280)
(2,617)
(9,897)
Research and development
(903)
(924)
(1,827)
(988)
(2,815)
(1,075)
(3,890)
Royalty income
53
73
126
94
220
79
299
Other operating income/(expense)
(429)
(912)
(1,341)
(125)
(1,466)
(122)
(1,588)
Operating profit
1,249
784
2,033
1,912
3,945
1,556
5,501
Net finance costs
(149)
(174)
(323)
(230)
(553)
(192)
(745)
Profit on disposal of associates
-
-
-
3
3
-
3
Share of after tax profit of associates and joint ventures
9
2
11
15
26
5
31
Profit before taxation
1,109
612
1,721
1,700
3,421
1,369
4,790
Taxation
(348)
(139)
(487)
(192)
(679)
(73)
(752)
Tax rate %
31.4%
22.7%
28.3%
11.3%
19.8%
5.3%
15.7%
Profit after taxation
761
473
1,234
1,508
2,742
1,296
4,038
Profit attributable to non-controlling interests
210
34
244
94
338
85
423
Profit attributable to shareholders
551
439
990
1,414
2,404
1,211
3,615
761
473
1,234
1,508
2,742
1,296
4,038
Earnings per share
11.2p
8.9p
20.2p
28.8p
49.0p
24.6p
73.6p
Previously reported operating profit
1,240
779
2,019
1,910
3,929
1,554
5,483
Previously reported net finance costs
(142)
(167)
(309)
(223)
(532)
(185)
(717)
Previously reported earnings per share
11.2p
9.0p
20.2p
28.8p
49.0p
24.7p
73.7p
Adjusted income statement
2018
Quarter 1
Quarter 2
6 months
Quarter 3
9 months
Quarter 4
Full Year
£m
£m
£m
£m
£m
£m
£m
Turnover
7,222
7,310
14,532
8,092
22,624
8,197
30,821
Cost of sales
(2,177)
(2,078)
(4,255)
(2,387)
(6,642)
(2,533)
(9,175)
Gross profit
5,045
5,232
10,277
5,705
15,982
5,664
21,646
Selling, general and administration
(2,279)
(2,329)
(4,608)
(2,310)
(6,918)
(2,526)
(9,444)
Research and development
(887)
(868)
(1,755)
(961)
(2,716)
(1,017)
(3,733)
Royalty income
53
73
126
94
220
79
299
Adjusted operating profit
1,932
2,108
4,040
2,528
6,568
2,200
8,768
Net finance costs
(146)
(172)
(318)
(229)
(547)
(181)
(728)
Share of after tax profit of associates and joint ventures
9
2
11
15
26
5
31
Adjusted profit before taxation
1,795
1,938
3,733
2,314
6,047
2,024
8,071
Taxation
(362)
(388)
(750)
(430)
(1,180)
(354)
(1,534)
Tax rate %
20.2%
20.0%
20.1%
18.6%
19.5%
17.5%
19.0%
Adjusted profit after taxation
1,433
1,550
2,983
1,884
4,867
1,670
6,537
Profit attributable to non-controlling interests
224
170
394
141
535
139
674
Profit attributable to shareholders
1,209
1,380
2,589
1,743
4,332
1,531
5,863
1,433
1,550
2,983
1,884
4,867
1,670
6,537
Adjusted earnings per share
24.7p
28.1p
52.7p
35.4p
88.2p
31.1p
119.3p
Previously reported Adjusted operating profit
1,923
2,102
4,025
2,524
6,549
2,196
8,745
Previously reported Adjusted net finance costs
(139)
(165)
(304)
(221)
(525)
(173)
(698)
Previously reported Adjusted earnings per share
24.6p
28.1p
52.7p
35.5p
88.3p
31.2p
119.4p
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