Summary
Group sales -2% reflecting continued contribution from key growth drivers offset by expected demanding prior year comparisons:
- Sales +2% excluding divestments (primarily Vesicare and non-core OTC brands)
- Pharmaceuticals and Vaccines sales -2%: US -6% (+4% excl. Vesicare with strong respiratory and oncology performances), Europe -3%, EMAP +8%, Japan -8% (+11% excl. Cervarix)
- Consumer Healthcare +1% (+6% excluding divestments)
Continued R&D pipeline progress:
- Positive FDA Advisory Committee recommendation for use of Breo Ellipta in treatment of COPD; FDA Action date 12 May
- MEK monotherapy, MEK/BRAF combination use and albiglutide filed in Europe; dolutegravir granted Priority Review in US; Anoro Ellipta filed in Japan
Continued delivery of financial efficiencies, strong cash generation and returns to shareholders:
- Adjusted net cash inflow from operating activities of £1.4 billion (Q1 2012: £1.1 billion)
- Initial phases of new major change programme, including European restructuring, progressing well
- Q1 core tax rate 22.4% reflecting benefit of US R&D tax credit; continue to expect full year core tax rate of around 24%
- Q1 dividend: 18p, +6%; continuing to target share repurchases for the year at £1-2 billion
Further measures to drive strategic focus and improve growth profile:
- Strategic review of Lucozade and Ribena completed; decision to pursue divestment subject to appropriate value realisation
- Pharmaceutical tail brands (with 2012 sales of around £3 billion from over 50 brands) to be formed into a Global Established Products portfolio; co-ordinated and reported separately from January 2014
2013 expectations for sales growth (~1%) and core EPS growth (3-4%) unchanged (both at CER)
