GSK Australia Reports 2012 Results to ASIC

GlaxoSmithKline (GSK) reported to the Australian Securities and Investment Commission (ASIC) for 2012 sales of $1,452m and a total profit before tax of $41m.

Overall sales increased marginally compared to last year and exports grew (up 9% to $521m) due to a strong performance in pharmaceutical manufacturing and the opiates division. Despite this strong performance, overall profits decreased due to one-off costs incurred primarily as a result of changes in the Pharmaceutical business.

“The Pharma industry in Australia appears to be in a negative cycle and GSK’s results are a reflection of an industry trend. The Pharma business in Australia has seen both decreased sales and lower margins,” said Geoff McDonald, General Manager Pharmaceuticals Australia.

In response GSK divested the majority of its Classic Brands (25 non-promoted and genericised products) in Australia to Aspen Global Incorporated (Aspen) and announced a change to the business focus and organisational structure of its pharmaceutical division, based in Melbourne.

“Our pipeline of new medicines has the potential to transform GSK’s future and as such the divestment of these brands allows us to focus more on bringing new medicines to Australian patients,” Geoff McDonald said.

R&D continues to be an important activity for GSK in Australia and last year $54m was invested in areas such as clinical trials and poppy crop improvements.

“The Australian Government has committed to a number of clinical trial reforms and it is imperative that these are implemented to ensure Australia remains competitive” Geoff McDonald said.

The Consumer Healthcare division experienced an increase in sales to $355m. Panadol Osteo continued to show strong growth (up 18%) as did specialist oral health brands which provided better solutions to consumers for gum health, tooth sensitivity, dry mouth and denture care.

GSK Australia also divested non-core over-the-counter (OTC) brands to Aspen from the Consumer Healthcare division to focus on priority core brands and products.

“Divesting our non-core Consumer Healthcare OTC products realised value for shareholders and simplified our business. We have a robust new product offering coming through and this will continue to grow our business,” Vincent Cotard, General Manager Consumer Healthcare Australasia said.

GSK invested $47m in capital across the business with a strong focus on the pharmaceutical manufacturing and opiates division. Manufacturing in pharmaceuticals performed strongly with an increase in export sales following the implementation of operational excellence initiatives that drove productivity. There was however, a decrease in sales for Consumer Healthcare manufacturing following the completion of the toothpaste line closure announced in 2011.

The Opiates division sales increased following good volume growth due to steady demand, however issues around market regulation continue to create uncertainty.

Opiates Divison General Manager, Steve Morris said “Demand for medicinal poppies continues to expand and we will continue to invest in both capital and R&D to meet this demand.”