2017 Financial highlights
Turnover £30.2 billion, +8% AER, +3% CER
Sales growth across all 3 businesses: Pharmaceuticals £17.3 billion, +7% AER, +3%, CER;
Vaccines £5.2 billion, +12% AER, +6% CER; Consumer Healthcare £7.8 billion, +8% AER, +2% CER
Improved Adjusted Group operating margin of 28.4% (2016: 27.5%). Pharmaceuticals 34.3%;
Vaccines 31.9%; Consumer Healthcare 17.7%
Total EPS 31.4p, after accounting charges of £1.6 billion related to US tax reform
Adjusted EPS 111.8p, +11% AER, +4% CER, in line with 2017 guidance
2017 free cash flow of £3.4 billion (2016: £3.0 billion)
23p dividend declared for quarter; 80p for 2017

2018 financial guidance
2018 Adjusted EPS Guidance: Growth is subject to uncertainty of timing and impact of possible generic competition to Advair in the US:
- In the event of no substitutable generic competitor to Advair in the US, expect 2018 Adjusted EPS growth to be 4 to 7% CER
- In the event of a mid-year introduction of a substitutable generic competitor to Advair in the US, expect full year 2018 US Advair sales of around £750 million at CER (US$1.30/£1) with Adjusted EPS flat to down 3% CER
- Both scenarios reflect the benefit of US tax reform with expected 2018 effective tax rate on Adjusted profits of 19-20%
Continue to expect 80p dividend for 2018

Product and pipeline highlights
New product sales of £6.7 billion, +51% AER, +44% CER, driven by strong performances from Tivicay and Triumeq in HIV, the inhaled Ellipta portfolio and Nucala in Respiratory and meningitis vaccines
Three key approvals: Shingrix vaccine for shingles; Trelegy Ellipta, once-daily single inhaler triple therapy for COPD; Juluca (dolutegravir and rilpivirine), first 2-drug regimen, once-daily, single pill for HIV
Preferential recommendation for Shingrix received from US CDC
Trelegy Ellipta approved in Europe for COPD
Nucala filed in US for eosinophilic COPD
Phase III HIV treatment study initiated investigating long-acting 2-drug regimen of cabotegravir plus rilpivirine administered every two months
In Oncology, Breakthrough Therapy Designation received from FDA for BCMA antibody-drug conjugate for relapsed and refractory multiple myeloma. Positive BCMA data presented at ASH meeting

Emma Walmsley, Chief Executive Officer, GSK said:

“In 2017 GSK delivered encouraging results from across the company with sales growth in each of our three global businesses, an improved Group operating margin, Adjusted EPS growth of 4% (CER) and stronger free cash flow.

“We are focused on competing effectively across our current portfolio and delivering three new launches which bring significant benefits to patients: Trelegy Ellipta which provides three medicines in a single inhaler to treat COPD; Juluca, the first 2-drug regimen, once-daily, single pill for HIV, helping to reduce the amount of medicines needed, and Shingrix, our new vaccine which represents a new standard for the prevention of shingles.

“Improving our Pharmaceuticals business remains our main priority and we are strengthening our pipeline
with a focus on priority assets in two current therapy areas, Respiratory and HIV, and two potential areas, Oncology and Immuno-inflammation. We will provide a further update to investors at Q2 on our plans for R&D.

“We continue to make changes across GSK to drive improvements in performance and we have made several new appointments to key leadership positions.

“Looking ahead, in 2018 we could see a potential generic version of Advair in the US and our 2018 guidance reflects this. With the sales momentum we anticipate from new and recent launches and focused improvements in operating performance we are increasingly confident in our ability to deliver mid to high single digit growth in Adjusted EPS CAGR (2016-2020 at 2015 CER).

“Cash generation also continues to be a key focus with free cash flow for the year improving to £3.4 billion. We met our commitment to pay a total dividend of 80p for 2017 and continue to expect to pay 80p for 2018.

“Finally, I would like to thank all our customers, suppliers and employees for their support and hard work in 2017 and look forward to working with them in 2018 and beyond to deliver our strategic priorities and improved performance for GSK.”

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