Julian Heslop

Chief Financial Officer

Cowen Healthcare Conference 10th March 2010

2009 Performance summary

Before restructuring costs

2009
m

2008
m

% Ch Change CER 3 2 16 16 12

Turnover EPS Free Cash Flow

28,368 121.2p 5,254

24,352 104.7p 4,679

Turnover growth despite decline in US Pharma

+7% +19% +22%
Rest of Pharma 2.2bn Japan Ph 1.6bn Emerging Markets Ph 3.0bn Europe Pharma 7.7bn 7 7bn Consumer 4.7bn

-13%
US growth rate impacted by losses to generics

US Pharma 9.2bn

+20%

+9%

2009 Turnover 28 4bn (+3%) 28.4bn

CER growth rates Rest of Pharma includes Stiefel sales of 248m
3

GSK Emerging Markets Pharma 2009 turnover

2009 3.0bn (+20%)
(+24%)

By region
SSA MENA China*
m

Top markets

(+16%)

(+10%)

6%) (+6

(+6%)

(+36%)

(+28%)

(+56%)
1

CIS

Mexico Latina

South Asia

GSK ranking #

11

13

16

*China includes HK Source: Turnover and growth is GSK 2009 as reported. Growth rates are CER. Rankings are IMS MAT Dec 09 Emerging markets by industry definitions incl Consumer and additional markets was 5.6bn (+16%)

(+ +22%)
1
4

Pharmaceuticals turnover analysis

2009
m

2008 m 15,992 338 16,330 805 3,246 , 20,381

% Change CER +5% >100% +12% -16% -45% +2%

Core* Influenza** Core + influenza Avandia Products impacted by g p y generics*** Total

19,060 1,814 20,874 771 2,069 , 23,714

* Core includes 378m related to 2009 bolt-on acquisitions (e.g. Stiefel and transactions in EMs). ** Influenza includes Relenza and vaccines related to annual influenza, H5N1 pre-pandemic and H1N1 pandemic pandemic. *** Products impacted by generics comprises US sales of Coreg, Imitrex, Lamictal, Paxil, Requip, Valtrex, Wellbutrin and Zofran plus Europe sales of Imitrex, Lamictal, Paxil and Zofran.
5

2009 Pharmaceuticals key growth drivers

Advair Vaccines* V i * Relenza Epzicom E i Avodart Ventolin V t li Lovaza Arixtra Ai t Tykerb Veramyst V t Subtotal All others th
* Includes H1N1 sales CER growth rates

4,977m 3,706m 3 706 546m 546 530m 477m 477 450m 254m 254 169m 142m 142 11,971m 8,903m 8 903 20,874m

+5% +30% +8% 8% +16% +26% 26% +31% +29% 29% +45% +72% 72% +23% +1% 1% +12%
6

720m >100%

Subtotal

New products contributed 1.3bn in 2009 (+55%)

2.1bn incl. 2 1bn incl pandemic vaccine

Hiberix Hib i
Pandemrix
US

US

2007
Sales from 2007-09 launches; CER growth rates

2008

2009
7

Innovative products coming from R&D p g

Examples of innovative products in late-stage development Benlysta

~30 phase III assets

darapladib

MAGE-3

2009 Consumer Healthcare turnover

Horlicks 255m +17% Lucozade 376m -3% Nutritional Healthcare
0.9bn (+3%)

Panadol 393m +10%

Aquafresh 496m -1% Oral Healthcare

1.5bn (+7%)

OTC Medicines
2.3bn (+8%)

alli 203m >100%

Sensodyne 457m +13%

NRT 339m -1%

4.7bn +7%
CER growth rates
9

2009 Performance summary

2009
m

Before restructuring costs

2008
m

% Change CER 3 13 8 ( ) (18) 6 16 23 28 ( ) (3) 25

Turnover Cost of goods SG&A: C SG&A Core Legal costs g Total SG&A

28,368 (7,095) 25.0% (8,609) (8 609) 30.3% ( (591) ) (9,200) 32.4 32 4%

24,352 (5,776) 23.7% (6,741) (6 741) 27.7% ( (611) ) (7,352) 30.2 30 2%

% in italics are % of turnover

10

2009 Cost of goods analysis

Before restructuring costs

Cost of goods sold as % of turnover

+0.6% +1.2%

-0.6% +0.1%

25.0% % 23.7%

2008

Generic competition p US and EU

Regional / Product mix

OE savings

Other

2009

11

2009 SG&A analysis excl. legal

Before restructuring costs

SG&A excluding legal as % of turnover

+0.7% +1.2% +0.5% +0 5% 30.3% -1.4% 27.7% +1.6%

2008

OE Savings Investment Stiefel / HIV markets

Exchange Gains / Losses

Pensions / Other

2009

12

2009 Performance summary

2009
m

Before restructuring costs

2008
m

% Change CER 3 13 6 2 16 23 25 13 3

Turnover Cost of goods SG&A R&D & Other oper. income p Operating profit

28,368 (7,095)
25.0%

24,352 (5,776)
23.7%

(9,200) (9 200)
32.4%

(7,352) (7 352)
30.2%

(3,951) (3,951) 13.9% 1,135 9,257 32.6%

(3,506) (3,506) 14.4% 541 8,259 33.9%

(1)

12

% in italics are % of turnover

13

Other operating income 1,135m

Formation of ViiV Equity disposals & other Product & IP divestments

541m

Royalties & milestones Impairments p

2009

2008

14

Net debt / Free cash flow

1,270m 2,792m 2 792m 5,254m 3,003m 3 003 10,173m 9,444m

Net debt YE 2008

Free Cash Flow

Dividends

Acquisitions

Exchange & other

Net debt YE 2009

15

Committed to improving returns in R&D p g

R&D returns over the last decade have been disappointing1 Our estimates for GSKs late-stage portfolio2 Our goal is to improve this return by 25% via our R&D strategy

15%

15%

15%

10%

10%

10%

IRR
5%

5%

5%

0%

0%

0%

1. McKinsey, Nature Reviews, Drug Discovery (Aug 09) for small molecules. 13% for biopharms. 2. We have estimated the projected rate of return based on the investment made to create our late stage pipeline and our expectations on future long term sales performance. Our current late-stage portfolio includes pharma assets (eg small molecules and biopharms) and vaccines launched from 2007 onwards plus current phase IIb & III pipeline.

16

Highlights
GSK returned to growth in 2009: +3% CER Diversification is progressing well: Stiefel, HIV R t t i saving h b Restructuring i has been reinvested i growth markets i t d in th k t Additional restructuring will deliver significant savings
(500m b 2012 70% t th b tt (500 by 2012; ~70% to the bottom line) li )

R&D model is working and new product flow is improving Actions ongoing to improve returns in R&D Strong cash g g generation continued in 09: FCF of 5.3bn ( (+12%) ) Dividend growth continues (+7% to 61 pence) Disclosure of operating profit components within each segment
begins 1Q10
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