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- 2006 performance overview
2006 performance overview
Turnover, earnings per share growth and total shareholder return
Key performance indicators
Turnover
Earnings per share
Total shareholder return
Share price
At 23 February 2007, the share price was £14.50/$56.92 per ADR
GSK’s performance and development are driven by a number of important strategies
Strategies
Key developments in 2006
Optimising the performance of key products
Both the Pharmaceutical and Consumer Healthcare businesses focus on ways to improve the return from the Group’s intellectual property by maximising sales of key products. GSK’s activities include:
- achieving worldwide sales force excellence
- achieving Pharmaceutical and Consumer Healthcare marketing excellence
- maintaining the highest ethical standards
- improving the cost-effectiveness of operations
- Total turnover grew 9 per cent to £23.2 billion – Pharmaceuticals up 9 per cent to £20.1 billion; Consumer Healthcare up 6 per cent to £3.1 billion
- Top ten Pharmaceutical products:
- Seretide/Advair £3,313 million, up 11 per cent
- Vaccines products £1,692 million, up 23 per cent
- Avandia group of products £1,645 million, up 25 per cent
- Lamictal £996 million, up 19 per cent
- Wellbutrin £900 million, up 24 per cent
- Zofran £847 million, up 3 per cent
- Valtrex £845 million, up 24 per cent
- Coreg £779 million, up 38 per cent
- Imigran/Imitrex £711 million, up 3 per cent
- Flixotide/Flovent £659 million, up 5 per cent
- High potential products Avodart, Requip and Boniva delivered combined sales of £579 million
- Top five Consumer Healthcare products:
- Lucozade £301 million, up 14 per cent
- Aquafresh £283 million, down 3 per cent
- Sensodyne £257 million, up 19 per cent
- Panadol £207 million, up 6 per cent
- Ribena £169 million, down 1 per cent
- Operating margin increased by 1.9 percentage points to 33.6 per cent of turnover
- Continuing financial strength enabled the 2006 dividend to be increased to 48 pence (2005 – 44 pence)
- A new share buy-back programme of £6 billion over three years was announced
Delivering our product pipeline for patients
GSK aims to create the best product pipeline in the industry for the benefit of society. This includes developing a focused strategy to support the pipeline and manage the full life cycle of compounds from launch as prescription medicines through to potentially becoming over-the-counter products.
GSK measures R&D productivity by the number and level of innovation of the products it creates, and by the ability to address unmet patient needs.
- In February 2007, GSK had 158 pharmaceutical and vaccine projects in clinical development, compared with 149 in February 2006
- 31 major product opportunities were in phase III development or registration (13 NCEs, 6 new vaccines, 12 PLEs), including:
- Cervarix (cervical cancer)
- Tykerb (breast cancer)
- Allermist (allergic rhinitis)
- Coreg CR (cardiovascular conditions)
- Trexima (migraine)
- H5N1 (pandemic flu vaccine)
- Late stage projects terminated included Redona for type 2 diabetes and brecanavir for HIV/AIDS
Being the best place for the best people to do their best work
GSK is committed to creating the best place for the best people to do their best work by:
- recruiting and developing the best people in the industry
- supporting a culture of high reward for high performance
- ensuring good communication and employee involvement
- maintaining a diverse and healthy workforce
- The Group’s biennial global leadership survey of over 10,000 managers in 2006 showed:
- 91 per cent (2004 – 91 per cent) of managers believed “people in their department show commitment to performance with integrity”
- 90 per cent (2004 – 83 per cent) of managers were “proud to be part of GlaxoSmithKline”
- 86 per cent (2004 – 77 per cent) of managers would “gladly refer a friend or family member to work for GlaxoSmithKline”
- In 2006, 36.3 per cent of the global management population was female (2005 – 35.5 per cent)
Improving access to medicines
GSK is finding innovative ways to bring medicines, vaccines and health education to patients in all countries, including those suffering from epidemics and neglected diseases.
- Global community investment was valued at £302 million, 3.9 per cent of profit before tax
- The lymphatic filariasis elimination programme continued with another 155 million albendazole treatments donated, making almost 600 million treatments in total
- GSK shipped over 27 million Combivir tablets and nearly 59 million Epivir tablets to developing countries at not-for-profit prices. Approximately 120 million tablets were supplied by generic manufacturers licensed by GSK
- Other international humanitarian product donations totalled £22 million
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