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Annual Report 2021

New ambitions for patients, shareholders and our people.

Running man
This image is taken from a short film on GSK’s use of human genetics and advanced technology.

In 2021, we made major progress on our journey towards the most significant corporate change for GSK in more than 20 years.

We are on track to separate in 2022 to create two new leading companies, both with the opportunity to impact human health at scale and deliver compelling performance for shareholders.

GSK

GSK will unite science, talent and technology to get Ahead of disease Together. We will prioritise innovation in vaccines and specialty medicines, maximising the increasing opportunities to prevent and treat disease.

Step-change in growth 

  • Expected sales growth of more than 5% and adjusted operating profit growth of more than 10% on a compound basis 2021-26
  • R&D focused on the science of the immune system, human genetics and advanced technologies
  • Positively impacting the health of more than 2.5 billion people over ten years
  • Leading ESG performance to be maintained


We set out our new purpose, growth commitments and R&D catalysts at an investor update in June 2021. For more detail see gsk.com.

Haleon

Haleon will be a global leader 100% focused on consumer health. It will have a clear purpose to deliver better everyday health with humanity, and a focused strategy to deliver sustainable above-market growth and attractive returns to shareholders.


Strong prospects for growth

  • Exceptional portfolio of category-leading brands with attractive global footprint and competitive capabilities
  • Compelling strategy to outperform in a growing, £150 billion plus sector which is more relevant than ever
  • 4-6% annual organic sales growth in the medium term, sustainable moderate margin expansion and high cash conversion
  • Attractive growth profile with capacity to invest and deliver shareholder returns

We set out our strategy, capabilities and operations for Consumer Healthcare at a capital markets day in February 2022. For more detail see gsk.com.

Our business model

As we prepare for a new future, we continue to help improve the health of hundreds of millions of people around the world by discovering, developing and manufacturing innovative medicines, vaccines and consumer healthcare products.

What we do

We develop and deliver medicines, vaccines and consumer healthcare products that impact human health at scale. Our operations span the value chain from identifying, researching, developing and testing ground-breaking discoveries, to regulatory approval, manufacturing and commercialisation.

Central to our success are our people: experts in science, technology, manufacturing, regulation, intellectual property and commercialisation. We also collaborate with world-leading experts and form strategic partnerships to complement our existing capabilities.

The value we create: now and in the future

The greatest contribution we make is to improve the health of people around the world. In 2021 that included delivering 1.7 billion medicines, over 767 million vaccines* and 3.7 billion consumer healthcare products. Looking ahead, GSK has a clear ambition to positively impact the health of more than 2.5 billion people over the next ten years.

We create value for shareholders by investing in our business to provide shareholder returns, and in 2021 we paid a dividend of 80 pence per share. We have made new commitments to growth and a step-change in performance over the next five years.

We aim to be a modern employer, developing our people and offering a broad range of benefits, including preventative healthcare services, that help us attract and retain the best people.

We employ over 90,000 people across 92 countries and work directly with 37,500 suppliers. In 2021 we paid £1.3 billion in corporation tax, as well as a significant amount of other business and employment-related taxes.

* Including AS03 adjuvant sales

Delivering strategic transformation

In recent years, we have transformed GSK to improve performance, strengthen capabilities and prepare for a new future. We have done this by prioritising Innovation, Performance and Trust – across the entire company – driving a multi-year programme to improve R&D productivity, commercial execution, group structure and capital allocation. This is underpinned by a new culture with new leadership for more accountability.

Innovation

Innovation is critical to how we improve health and create financial value. In 2021, our total R&D expenditure was £5.3 billion, up by 3.5% AER on 2020. We have a robust late-stage R&D pipeline with many assets having the potential to be first or best in class. We continue to believe the rapid convergence of science and technology in biopharmaceuticals provides significant opportunity and is why our R&D will continue to focus on the science of the immune system, human genetics and use of advanced technologies.


Performance

Performance is delivered by investing effectively in our business and our people and executing competitively. Our ability to launch new products successfully and grow sales from our existing portfolio is key to our commercial success. Over the next five years, with 2021 as a base year, we expect GSK to deliver highly attractive growth with sales and adjusted operating profit of more than 5% and more than 10% respectively on a compound basis.

Trust

Trust underpins everything we do. We have maintained our acknowledged leadership in environmental, social and governance (ESG) issues, demonstrated by our sector-leading position in the Dow Jones Sustainability Index and our long-standing leadership in the Access to Medicine Index. We remain deeply committed to addressing the issues that matter for the sustainability of our company, including pricing and access, global health, the environment, and inclusion and diversity, working with integrity and care.

2021 performance summary

Strong commercial execution drives growth across Pharmaceuticals, Vaccines and Consumer Healthcare (excluding divestments/brands under review)

  • £34.1bn Group turnover stable at AER, +5% CER
  • Pharmaceuticals £17.7 billion +4% AER, +10% CER; new and specialty medicines £10 billion +20% AER, +26% CER
  • Vaccines £6.8 billion -3% AER, +2% CER
  • COVID-19 solutions sales £1.4 billion
  • Consumer Healthcare £9.6 billion -4% AER, stable CER (+4% excluding brands divested/under review)


Cost discipline supports delivery of adjusted EPS growth

  • Total EPS 87.6p -24% AER, -13% CER
  • Adjusted EPS 113.2p -2% AER, +9% CER; contribution to growth from COVID-19 solutions +8% AER, +9% CER
  • Total operating profit £6.2 billion -20% AER, -9% CER
  • Adjusted operating profit £8.8 billion -1% AER, +9% CER
  • Dividend of 80p


Continued momentum in R&D delivery and strengthening of pipeline

  • Three major product approvals; 8 phase III starts; 22 vaccines and medicines in pivotal trials
  • Strong pipeline of 21 vaccines and 43 medicines, many of which offer potential best or first-in-class opportunities for patients
  • 20+ deals executed securing access to novel clinical programmes including in immuno-oncology, immuno-neurology and flu, plus technologies that expand our capabilities in human genetics and artificial intelligence/machine learning (AI/ML)


On track to create two new leading companies through demerger in mid-2022

  • New GSK investor update in June 2021 set out our new purpose, growth commitments and R&D catalysts. For detail see gsk.com
  • Consumer Healthcare capital markets day in February 2022 highlighted our strategic priorities, key growth drivers and detailed financial information. For detail see gsk.com


Leading ESG performance

  • 1st in the pharmaceutical industry for Dow Jones Sustainability Index
  • 1st in the Access to Medicine Index
  • Gold recognition in S&P's Sustainability Yearbook
  • A- in CDP Climate Change

Our long-term priorities

We put Innovation, Performance and Trust first to realise our ambitions for patients, shareholders and our people. In 2021 we delivered a strong performance, and we are on track for a successful demerger to create two new leading companies in 2022.

Innovation

We invest in scientific and technical excellence to develop and launch a pipeline of new products that meet the needs of our patients, payers and consumers.

2021 objectives

  • Deliver Innovation sales with excellent commercial, R&D and supply chain execution in oncology, HIV and Vaccines
  • Accelerate and strengthen pipeline with robust commercial input, including business development

Progress

  • Received three major approvals in 2021: Apretude, our long-acting HIV prevention medicine, Jemperli for endometrial cancer and Xevudy, for COVID-19
  • Strong pipeline of 21 vaccines and 43 medicines, many of which offer potential best or first-in-class opportunities for patients and 22 of which are in pivotal trials
  • 20+ deals executed securing access to novel clinical programmes including with iTeos in immuno-oncology, Alector in immuno-neurology and Vir Biotechnology in flu, plus technologies that expand our capabilities in human genetics and AI/ML

2022 priority objectives

  • Deliver Innovation sales with excellent commercial, R&D and supply chain execution
  • Further accelerate and strengthen pipeline with dedicated in-house expertise and robust commercial input, including optimised capital allocation and business development
Performance

We deliver growth by investing effectively in our business, developing our people and executing competitively.

 

2021 objectives

  • Continue to prioritise spending to deliver growth and return on investment
  • Continue to deliver two-year programme to prepare GSK for separation into two new leading companies
  • Build a stronger, more diverse workforce for two new leading companies


Progress

  • Strong commercial execution across Pharmaceuticals, Vaccines and Consumer Healthcare
  • Pharmaceuticals £17.7 billion +4% AER, +10% CER with double-digit growth in new and specialty medicines +20% AER, +26% CER 
  • Vaccines £6.8 billion -3% AER, +2% CER
  • Consumer Healthcare -4% AER, stable CER; -1% AER, +4% CER excluding divestments/brands under review
  • On track to deliver separation plans in mid-2022


2022 priority objectives

  • Deliver more than 5% sales growth and more than 10% adjusted operating profit on a compound basis in the next five years
  • Continue to prioritise spending to deliver growth and return on investment
  • Deliver a successful demerger in mid-2022
Trust

We are a responsible company. We commit to use our science and technology to address health needs, make our products affordable and available and be a modern employer.

2021 objectives

  • Continue to deliver on-time, in-full supply of our products
  • Improve manager capability to motivate, focus, develop and care for people
  • Continue to deliver progress on Trust commitments


Progress

  • Maintained sector-leading rankings in ESG indices, including the Dow Jones Sustainability Index, Access to Medicine Index and Antimicrobial Resistance Benchmark
  • Maintained supply and manufacturing without significant disruption throughout the pandemic
  • Made further progress to deliver on net zero impact on climate, and a net positive impact on nature by 2030
  • Rolled out a new training programme to develop our managers to support them to be great managers and lead with care
  • Continued to prioritise diversity, with good progress made against our gender and ethnicity targets to improve representation in senior roles
  • WHO recommended wider use of our RTS,S vaccine for children in regions with moderate to high malaria transmission


2022 priority objectives

  • Deliver leading ESG performance and effective risk management with disciplined compliance

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