PDF Image HIV virus

Image HIV virus

Annual Report

2017

GSK Annual Report 2017

GSK is a science-led global healthcare company

In the Strategic report

Our new CEO discusses 2017 performance and our new long-term priorities

See pages 05?07

How we create long-term value

See pages 08?09

Industry trends

See pages 10?11

Our new long-term priorities: Innovation, Performance and Trust

See pages 12?17

Measuring performance and managing risk

See pages 18?21

Innovation and Performance in each of our three businesses

See pages 22?41

How our three businesses together contribute to our Trust priority

See pages 42?51

Financial review

See pages 52?78

Cover image

30 years after developing the first HIV medicine, our research into treatment and prevention of HIV continues. We remain at the forefront of helping people living with HIV, driving innovation and working with communities all over the world.

Cautionary statement

See the inside back cover of this document for the cautionary statement regarding forward-looking statements.

GSK Annual Report 2017

Our financial performance in 2017a

?30.2bn

Group turnover

AER +8% CER +3%

?4.1bn

Total operating profit

AER +57% CER +39%

31.4p

Total earnings per share

AER +67% CER +36%

?6.9bn

Net cash flow from operating activities

?3.4bn

Free cash flow

01 Strategic report Governance and remuneration Financial statements Investor information

?6.7bn

New product salesb

AER +51% CER +44%

?8.6bn

Adjusted operating profit

AER +12% CER +5%

111.8p

AER +11%

+4% Adjusted earnings per share CER

?3.9bn

Dividends declared for 2017

80p

2017 dividend per share

Strategic report

At a glance Chairman's statement CEO's statement How we create long-term value Industry trends Our long-term priorities How we measure success How we manage risk Pharmaceuticals Vaccines Consumer Healthcare Trust Group financial review

Governance

Chairman's Governance statement Our Board Our Corporate Executive Team Leadership and effectiveness Nominations Committee report Accountability Audit & Risk Committee report Relations with stakeholders Science Committee report Corporate Responsibility Committee report

Remuneration report

Investor information

02 Chairman's annual statement

114 Quarterly trend

244

04 Annual report on remuneration

116 Five year record

248

05 2017 Remuneration policy summary 142 Product development pipeline

251

08 10 Financial statements

Product, competition and

intellectual property

254

12 Directors' statement of 18 responsibilities 20 Independent Auditor's report 22 Financial statements 30 Notes to the financial statements 36 Financial statements of 42 GlaxoSmithKline plc prepared 52 under UK GAAP

Principal risks and uncertainties

257

148 Share capital and control

267

149 Dividends

269

158 Financial calendar

269

162 Annual General Meeting 2018

270

Tax information for shareholders

270

Shareholder services and contacts 272

233 US law and regulation

274

Group companies

276

Glossary of terms

287

80

82 86 88 94 96 96 107 109

Footnotes

aAER growth rates represent growth at actual exchange rates. We use a number of adjusted, non-IFRS, measures to report the performance of our business, as described on page 58, including Adjusted results, free cash flow and CER growth rates. These measures are used by management for planning and reporting purposes and may not be directly comparable with similarly described measures used by other companies. Adjusted results exclude a number of items and are presented as management believes that Adjusted results allow the key trends and factors driving that performance to be more easily and clearly identified by shareholders. Non-IFRS measures may be considered in addition to, but not as a substitute for or superior to, information presented in accordance with IFRS. A reconciliation of Total results to Adjusted results is set out on page 67.

bAs defined in 2015, new products are as follows: Pharmaceuticals: Relvar/Breo Ellipta, Incruse Ellipta, Anoro

110

Ellipta, Arnuity Ellipta, Eperzan/Tanzeum, Nucala, Tivicay, Triumeq. Vaccines: Menveo, Bexsero, Shingrix.

02 GSK Annual Report 2017

GSK at a glance

Our purpose

To help people do more, feel better and live longer.

Our goal

To be one of the world's most innovative, best performing and trusted healthcare companies.

Our strategy

Bring differentiated, high-quality and needed healthcare products to as many people as possible, with our three global businesses, scientific and technical know-how and talented people.

Our values and expectations

Our values and expectations are at the heart of everything we do and form an important part of our culture.

Our values Patient focus Transparency Respect Integrity

Our expectations Courage Accountability Development Teamwork

Three global businesses

Immune system T-cells attacking a cancer cell Herpes zoster virus of shingles

Novamin, a key technology in Sensodyne Repair and Protect

GSK Annual Report 2017

03 Strategic report Governance and remuneration Financial statements Investor information

Pharmaceuticals

Leading positions in Respiratory and HIV

% of Group turnover

57%

Read more page 22

Vaccines

Broadest portfolio with leading position in meningitis and opportunity in shingles

% of Group turnover

17%

Read more page 30

Consumer Healthcare

Category leadership in Respiratory, Pain relief and Oral health

% of Group turnover

26%

Read more page 36

Focused on our new long-term priorities

Innovation

See pages 12?13

Performance See pages 14?15

Trust

See pages 16?17

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