GSK says very confident about consumer margin goal of at least 20 percent
FRANKFURT (Reuters) - GlaxoSmithKline (GSK.L) reaffirmed its margin goal for its consumer healthcare business after agreeing to buy Novartis (NOVN.S) out of their joint venture (JV) for $13 billion.
"We are very confident in terms of delivering on the outlook of at least 20 percent by 2020, which is what we confirmed at the formation of the JV," GSK Chief Executive Emma Walmsley said on a media call after the purchase was announced on Tuesday.
The margin was 17.7 percent last year.
She cited a focus on high margin brands such as Sensodyne toothpaste or anti-inflammatory product Voltaren, cost cuts in the supply chain and investments in innovation.
Intense price competition online, led by Amazon (AMZN.O), as well as from cheaper store-brand products has weighed on the consumer care industry, affecting rivals such as Bayer (BAYGn.DE), Pfizer (PFE.N) or Sanofi (SASY.PA).
She added the strategic review of Horlicks and other consumer healthcare nutrition brands reflected a focus on oral health and non-prescription drugs, and a potential exit from the entire nutrition and dietary product category.
(Reporting by Ludwig Burger; Editing by Arno Schuetze)
