Annual Report 2018 - GSK

1 Annual Report 2018. GSK Annual Report 2018. Contents Strategic Report Corporate Governance Financial statements GSK at a glance 01 Chairman's Governance statement 66 Directors' statement of Chairman's statement 02 Our Board 68 responsibilities 126. CEO's statement 03 Our Corporate Executive Team 71 Independent Auditor's Report 128. Financial performance 04 Leadership and effectiveness 72 Financial statements 140. Our long-term priorities 07 Nominations Committee Report 77 Notes to the financial statements 144. Key performance indicators 08 Accountability 79 Financial statements of Industry trends 09 Audit & Risk Committee Report 79 GlaxoSmithKline plc prepared Stakeholder engagement 11 Relations with stakeholders 89 under UK GAAP 219.

2 Our business model 12 Science Committee Report 91. Pharmaceuticals 13 Corporate Responsibility Investor information Vaccines 18 Committee Report 92 Quarterly trend 224. Consumer Healthcare 21 Five-year record 229. Trust 24 Remuneration Report Product development pipeline 235. Risk management 34 Chairman's Annual statement 96 Product, competition and Group financial review 37 Annual Report on remuneration 98 intellectual property 238. 2017 Remuneration policy summary 120 Principal risks and uncertainties 241. Share capital and share price 251.

3 Dividends 253. Financial calendar 253. Annual General Meeting 2019 254. Tax information for shareholders 254. Shareholder services and contacts 256. Cautionary statement US law and regulation 258. See the inside back cover of this document for the cautionary statement Group companies 260. regarding forward-looking statements. Glossary of terms 271. Non-financial information statement The following aligns to the non-financial reporting requirements contained in sections 414CA and 414CB of the Companies Act 2006. Description of the business model Human rights Policy, due diligence and outcomes GSK at glance 01 Human rights 31 Summary of our principal risks 34.

4 Our business model 12 Data and engagement 31 Principal risks and uncertainties 241. Social matters Third parties 31 Viability statement 44. Anti-corruption and bribery Audit & Risk Committee Report 79. Global health 25. Our policies Health security 26 Living our values and expectations 30. Affordability and availability 26 Reporting and investigating concerns 30 All of our public policies, codes and standards Employees Anti-bribery and corruption 30 are available on Environmental matters Employee engagement 28. Diversity 28 Carbon, water and waste 32.

5 Wellbeing and development 29. Gender pay gap 28. Living our values and expectations 30. Board diversity 28. Non-IFRS measures We use a number of adjusted, non-IFRS, measures to Report the performance of our business. Total reported results represent the Group's overall performance under IFRS. Adjusted results and other non-IFRS measures may be considered in addition to, but not as a substitute for or superior to, information presented in accordance with IFRS. Adjusted results and other non-IFRS measures are defined on pages 40 to 42 and reconciliations to the nearest IFRS measures are on pages 51 and 56.

6 We believe that Adjusted results, when considered together with Total results, provide investors, analysts and other stakeholders with helpful complementary information to understand better the financial performance and position of the Group from period to period, and allow the Group's performance to be more easily compared against the majority of its peer companies. These measures are also used by management for planning and reporting purposes. They may not be directly comparable with similarly described measures used by other companies.

7 01. GSK Annual Report 2018. Strategic Report Governance and remuneration Financial statements Investor information GSK at a glance We are a science-led global healthcare company. Our purpose is to help people do more, feel better, live longer. We have three global businesses that discover, develop Our strategy is to bring differentiated, high-quality and manufacture innovative pharmaceutical medicines, and needed healthcare products to as many people vaccines and consumer healthcare products. Every day, as possible, with our three global businesses, scientific millions of patients and consumers across the world use and technical know-how and talented people.

8 Our products. In 2018, we delivered around billion We are a science-led healthcare company. In 2018, packs of medicine, 770 million vaccine doses and we invested billion in R&D and announced a new billion consumer healthcare products. approach to our R&D focusing on science related to In 2018, our turnover was billion, up 2% at actual the immune system, human genetics and advanced exchange rates (AER), 5% at constant exchange rates technologies. (CER). The US is our largest single commercial market, Our three long-term priorities of Innovation, Performance representing 39% of revenue, followed by International and Trust are designed to create long-term value for at 35% and Europe at 26%.

9 Patients, consumers and shareholders. Our values . Our 95,490 employees across the world are driven patient focus, transparency, respect and integrity . by our purpose and our goal to become one of the and our expectations courage, accountability, world's most innovative, best-performing and trusted development and teamwork define our culture. healthcare companies. Pharmaceuticals Vaccines Consumer Healthcare Our Pharmaceuticals business We are the leading Vaccines company Our Consumer Healthcare business has a broad portfolio of innovative in the world, delivering over 2 million develops and markets a portfolio and established medicines, with vaccine doses every day to people of globally recognised consumer- leadership positions in respiratory living in 158 countries.

10 Our portfolio preferred and expert-recommended and HIV. We are strengthening and pipeline help protect individuals brands in the oral health, pain relief, our pipeline through a focus on throughout their lives. We have respiratory, skin health, nutrition and immunology, human genetics and recently introduced breakthrough digestive health categories. These advanced technologies to help vaccines Shingrix for shingles and category-leading brands include us identify the most promising Bexsero, the first vaccine for Sensodyne, parodontax, Poligrip, new medicines.