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15 Apr 2011 - GSK Australia Reports 2010 Results to ASIC

• Exchange rates and reduced Relenza (zanamivir) sales impact results
• R&D investment increased by 24%



GlaxoSmithKline Australia (GSK) reported last week to the Australian Securities & Investments Commission (ASIC) sales revenue of $1.5billion, a pre-tax profit of $19.5million and a 24% increase in R&D spend to reach $56 million for 2010.

In 2010 sales in Consumer Healthcare were strong, increasing by 7% (to $321m). Pharmaceuticals were down by 26% (to $1.1b) and Chemicals – manufacture of plant based medicinal alkaloids for the pain relief market – was down by 18% (to $70m).

Mr Graham Read, General Manager Consumer Healthcare Australia & New Zealand, said:
“Building on a very solid performance in 2009, the Consumer business had an outstanding year in 2010. It is particularly pleasing that all product categories within the business performed at or above forecasted levels resulting in a year-end result that showed market share gains against major competitors.

“A true measure of success in a business like ours is consumer consumption and repeat purchase By that measure, all our leading brands have consistently month-on-month out-performed our major competition and led in their respective categories. We continue to bring innovative products in to the market wherever possible while building an increasing export business for a number of our key brands.”

“With the momentum we have generated in the business, particularly in the last two years and since the GFC, I look forward to a challenging 2011 confident we have the brands, the strategies and the talent to have another successful year,” Mr Read said.

Ms Deborah Waterhouse, General Manager Pharmaceuticals Australia & New Zealand, said:
“As expected, total profits were lower in 2010 compared to 2009 mostly due to reduced Relenza sales, the impact of exchange rate movement and some one-off costs. I am delighted to say that our investment in Research and Development has increased by 24% and we remain one of Australia’s top 15 investors.

“Our focus for 2011 is on improvements in business efficiency, investing in new initiatives and product approvals as well as continuing our commitment to advancing medicine through Research and Development,” Ms Waterhouse said.

Through 2010 the domestic pharmaceutical sales business continued to grow showing increased revenue from 2009. This will have a positive impact in 2011 and provide the opportunity to increase the current investment within the local manufacturing facility in Boronia.

“While a decrease in tablet manufacturing at GSK’s Boronia site impacted sales and revenue in 2010, solid dose packaging and innovative blow-fill-seal production grew steadily. Solid dose packaging will continue to increase at the Boronia site with further investment over the next three years and there is a strong pipeline of new blow-fill-seal products in development which will further expand the site’s capability,” Ms Waterhouse said.

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There was a reduction in the need for further stocks of Relenza, an anti-viral medicine, to support the pandemic flu preparedness plan. This resulted in a significant reduction in sales volume in 2010 and related export earnings.

“Our Chemicals business is export driven and although high worldwide demand for product remains, like many others the business experienced a decline in earnings predominantly due to the current strong Australian dollar,” Ms Waterhouse said

”As a result of these two factors our Export sales reduced from $942.9million in 2009 to $584.6million in 2010.

Operational efficiencies to the business have resulted in one off costs including restructuring costs. Other one-off costs in 2010 included impairment of some assets.

“Research and Development is the foundation of GSK’s business. Our pipeline of new products is strong and our scientists work with Australian researchers and doctors to discover new ways of treating and preventing disease. We currently have over 30 discovery projects underway and our Medicines Research Unit is the only Phase 1 facility supported by a pharmaceutical company in Australia.

GSK provides around 1620 jobs for men and women across Australia and in 2010 was recognised as an EOWA Employer of Choice for Women.

“Balance is the foundation for the way we work at GSK Australia. Our guiding principles are to: focus on patient needs; respect people; communicate honestly and act with integrity.,” Ms Waterhouse said.

GSK’s Global CEO, Andrew Witty, at the end of 2010 said: “We have substantially re-engineered GSK’s business model over the last two and a half years, through major restructuring and a rigorous returns-based approach to capital allocation. All of this is being done with the direct aim of enhancing returns to shareholders through continued dividend growth and other measures such as the new long-term share buy-back programme we initiated today.”

GlaxoSmithKline - is a global research-based pharmaceutical and healthcare company. Since 1886 we have delivered the highest quality medicines, vaccines and over-the-counter healthcare products to Australians while investing in local research and providing skilled jobs. For further information please visit www.gsk.com.au

GSK has four manufacturing facilities in Australia. Pharmaceutical products are manufactured in Boronia on the outskirts of Melbourne. It is one of GSK’s largest sterile facilities globally and a world leader in innovative blow-fill-seal technology.

The GSK site at Ermington, in north-western Sydney, manufactures consumer products including Panadol. The remaining facilities in Latrobe, Tasmania and Port Fairy, Victoria, support production of morphine and other opiates for the pain relief market.

For more information on Relenza (zanamivir) and for a Consumer Medicine Information sheet visit www.gsk.com.au.

Ends

Enquiries
Lisa Maguire, Associate Director Corporate Affairs,GSK
Mb: 0449 950 745 or (03) 9721 6637

 

 

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