GlaxoSmithKline (GSK) Reports Q2 EPS of GBP0.27

Pharmaceutical sales, £4.4 billion, +12% AER, +3% CER, Vaccines sales, £1.1 billion, +16% AER, +5% CER, Consumer Healthcare sales, £1.9 billion,+10% AER, flat at CER

Group operating margin 28.5%; Pharmaceuticals 33.6%; Vaccines 33.7%; Consumer 17.7%

Total Q2 loss per share of 3.7p reflecting charges resulting from increases in the valuation of Consumer and HIV businesses and new portfolio choices

Updated 2017 guidance: Adjusted EPS growth now expected to be 3% to 5% CER reflecting impact of Priority Review Voucher

H1 Free Cash Flow £0.4 billion (H1 2016: £0.1 billion)

19p dividend declared for Q2; continue to expect 80p for FY 2017

New product sales of £1.7 billion, +62% AER, +47% CER

HIV two drug regimen (dolutegravir and rilpivirine) filed for approval in US and EU

Shingrix filed for approval in Japan

FDA approval received for subcutaneous Benlysta for treatment of SLE

New priorities to strengthen innovation, improve performance and build trust

Pharmaceutical R&D pipeline reviewed with target over time to allocate 80% of capital to priority assets in two current (Respiratory and HIV/infectious diseases) and two potential (Oncology and Immuno-inflammation) therapy areas; more than 30 pre-clinical and clinical programmes to be stopped

Extended cost reduction programme expected to deliver additional £1 billion annual cost savings by 2020 driven by new business priorities, improved supply chain efficiency and reduced administrative costs

Enhanced focus on improved cash generation and strengthening credit profile

Dividend of 80p expected for 2018 in conjunction with new dividend policy

Group outlook for 2020: Expected 5 year percentage CAGR to 2020 on a CER basis for sales of low-to-mid-single digits and Adjusted EPS of mid-to-high single digits