GlaxoSmithKline reveals a 32 percent jump in fourth-quarter net profit, inflated by contributions from emerging markets
By Ian Armitage
The improved performance helped the company return to sales growth for the first time since 2007. It reported a 3 percent increase in full year sales, thanks to a big contribution from new products launched over the last two years, which contributed 1.3 billion pounds to its turnover.
Operating profit increased and group turnover was up 13 percent to 8.09 billion pounds, boosted by a 78 percent rise in vaccine sales to 1.52 billion pounds, including pandemic vaccine sales of 836 million pounds.
The flu drug Relenza contributed 256 million pounds, compared to just 13 million pounds the year before.
Andrew Witty, CEO of GSK (pictured), said: “2009 saw GSK return to sales growth and I am confident of our prospects in 2010.”
GlaxoSmithKline also announced that it is looking to cut R&D infrastructure costs as part of a bid to create additional annual pretax savings of 500 million pounds by 2012.
“We ought to be continuously looking for how we might improve the rate of return on the investment money that shareholders allow us to commit to R&D,” Witty said.
The company did not provide targets for job reductions, but they are likely to be inevitable.
“Obviously I don't like to see anybody leave the organisation,” Witty added. “But the reality is that we do, from time to time, need to look at ways in which we can improve our probability of success”.
Highlights:
• Full year sales growth of 3 percent with successful delivery of diversification strategy
• Continued new product delivery
• Sustained R&D productivity
• Further actions to improve R&D returns
• Restructuring programme expanded; additional savings of 500 million pounds by 2012
• Increased 2009 dividend of 61p, up 7 percent
Edited by Ellie Duncan
SOURCE: www.gsk.com