Good morning, and good afternoon, everyone. Thank you for joining us today for our Q2 2018 Results which were issued earlier today. You should have received our press release on both results and the 23 announcement and can download our presentations from GSK's website. The presentations today are also being webcast. Before we begin, please refer to Slide 2 of our presentation for our cautionary statements. And with that, I'll now hand you over to our Chief Executive Officer, Emma Walmsley.

So, thanks very much, Seth and let me reiterate a very warm welcome to everybody. We're going to be splitting this afternoon into two sections. Firstly, Simon and I are going to be covering our Q2 results, and then after a break we'll hear from on new Chief Scientific Officer, Dr. Hal Barron for the first of his updates on R&D and our pipeline. For both sessions we have a full Q&A team in the room and I know they’re also very much looking forward to talking with you all at our reception at the end of the meeting. So this time last year, I laid out my three long-term priorities for GSK, innovation, performance and trust, all to be powered by a necessary change in culture. When I first laid this out, of course it was simply a framework but I do hope you now have a better understanding of the changes we're starting to make. Innovation was our first priority and is the very heart of GSK's purpose which is to use our science, to develop better medicines, vaccines and Consumer Healthcare products for patients so they can do more, feel better, and live longer. Now Hal is going to talk to you later about how we’re taking our approach to innovation forward but on this first priority, we've already made some great progress over the past 12 months. First, we've seen three major approvals in Shingrix, Trelegy and Juluca and the launches are going well. We’ve also taken some significant steps in advancing our early stage pipeline and have started our first pivotal study for BCMA in multiple myeloma. On performance, I’ve said very clearly that GSK has to deliver better results. We've taken a series of actions to do this such as reallocating resources to keep…

Thank you, Emma. Overall today second quarter results demonstrate encouraging progress towards our key strategic objectives. We continue to grow sales across the business and deliver operating margin improvements while investing the high new product launches. Based on this momentum, we are confident in our delivery for the rest of the year and have upgraded our guidance for constant currency adjusted earnings per share growth of 2018. Our earning release provides an extensive amount of information. So I'm going to focus on major points, our expectations for the rest of 2018, and important comparisons to take note within your modeling. I will also provide greater detail on the new major restructuring program we are launching today. As usual, my comments will be on a constant exchange rate basis except where I specify otherwise and I will cover both total and adjusted results. Starting with the headline results, group sales are 4% to £7.3 billion, total EPS 9 pence and adjusted EPS 28.1 pence up 10%. Total operating profit was £0.8 billion up over 100% compared to the small operating loss in Q2 2017. Adjusted operation profit grew 7% ahead of sales with profit growth in all three businesses contributing despite significant investments behind new products in respiratory, HIV, and vaccines especially Shingrix. On currency the strengthening of sterling compared with last year particularly against the dollar resulted in a headwind of 4% on sales and 7% to adjusted EPS. If exchanged rates remain in line with the rates at the end of the second quarter, we would expect the full year headwind from currency to be approximately 6% to adjusted EPS. Total results for the quarter show a significant improvement on Q2 2017 with reductions in a number of the more significant adjusting items. Firstly intangible impairments were materially lower…

We'll be taking questions in the room and over the phone from the mic roving side. We will request that those asking questions to state name and institution for asking the question and ask no more than two questions at a time so that everybody has a chance to participate. For those in the room please wait until myself or a member of my team has passed the microphone to you before you start speaking. And after you’ve asked your question please can you pass it back again so that we can move it on to the next questioner. Thank you. With that I’ll hand you over to the team.

James Gordon from JPMorgan. It’s a pipeline question but the financial question rather than a pipeline data question. Two questions one was just R&D was down this quarter but how much the R&D grow in the next few years and asking that both in terms of the P&L and also in terms of M&A. So for the P&L how - I mean you put some cost savings coming through. But if I benchmark versus peers and the level of investment for the Pharma business could you go up to high teens as many of your large peers are. And in terms of the R&D not going through the P&L but actually doing some business development. How aggressively might you do that so I think previously you said just bolt-ons, but could it be quite big bolt-on what is bolt-on count as they were not lot of very eminent obvious face regarding decisions. Could a big chunk of the rebuild be external?

I'll just answer both of those briefly. So in terms of percentage of R&D I’m not a big fan of saying there is needs to be a percentage spend in R&D - and I know that how we’ll take this position as well. We will spend according to the data readouts that come and we are minus six excluding the PVR in part because we stop the whole load of programs and as Simon has already said, we expect increases to accelerate towards the end of the year and for the models you should assume that the savings program we put in place is assuming that the data justify it is added to spend that we have. I'm quite relaxed about having even a potentially quite lumpy R&D spend according to the assets that we’re putting in place. And in terms of PD, I'm not going to sort of set numeric criteria around what qualifies as a bolt-on. I would anchor us in we’re feeling good about some of the organic momentum that we have whether it's the recent launches that we have or indeed some potential assuming that approved pending ones in that period 18 to 20 for our outlook. Whether it's the new dual therapies in HIV or indeed BCMA you’re going to hear a lot more about. And then we have a whole new cohort that we’ll be looking at and how we’ll highlight some of later today. But we absolutely do expect to do more business development to strengthen that pipeline it's the first priority and capital allocation. In the room we’ve got Kevin Sin who has been here for all of three weeks. So he won’t be outlining his full and complete structure for that yet, but you will hear from Hal how he thinks about PD. And by the way obviously focusing on the priorities that he is laying out in terms of assets or technologies, partnerships as well. But it’s not just going to be in-licensing, we're also looking at out-licensing and creating more flexibility for funding in that way. We just announced tapinarof it may also be in other parts of the broader portfolio as we have a review ongoing with Horlicks. So we're quite comfortable that with the strategy that we’re laying out today organization that we have of the balance sheet and the capacity to foresee that but a lot is going to depend on the data that reads out in the next couple of years in terms of how much we need to accelerate that or not.

Just to add to that. I mean remember also when you look at R&D spend the three businesses have very different characteristics. So that the group numbers not very useful if you look pharma R&D to pharma spend and the overall shape of that P&L I think if you kind of run your own models through the numbers we’re just talked about I think - that’s a relevant benchmark and I think they’re pretty competitive as to what we expect and we obviously have factored in some element to PD because that’s central part of the strategy clearly there is a degree of unpredictability around that but we’ll have to deal with when we get there.

Next question please. So a fun game of entertaining pas the mic, for the day in case you guys pick these next.

So Graham Parry from Bank of America/Merrill Lynch. And so you’ve upgraded 2018 guidance and nothing consensus it looks like it's running a little bit below the range at the moment. But the next year you’re still going to be facing slowing HIV potential Advair generic coming maybe possibly even at the turn of the year. The increasing in R&D which that you got some savings to help, but when you put all that together how comfortable are you with where consensus numbers are sitting for 2019 and in particular the current assumption of flat margins into next year. And then secondly question for David on dolutegravir so NBRx absolutely have now dropped around 28% since Biktarvy launched in Biktarvy's equaling you roughly on NBRx. TRx look like they’re flattening off in terms of absolute and so could you perhaps just run through the dynamics that you’re seeing in the market. How long you think it takes for new-to-brand prescriptions to actually translates into total prescriptions and if you’re seeing any switching from dolutegravir regimens always it just all the new patient share gain at the moment?

So David that one is coming to you in a second but I mean just on to the first one. We’re saying, we’re obviously not going to - or we don’t comment on consensus. We’re very pleased with the 2018 upgrade and as Simon said, we’re feeling increasingly confident about our 2020 outlook whether that’s because of the momentum Shingrix the consumer buyouts, U.S. tax reform and we are absolutely expecting to digest the Advair genericization. And I’ll remind everyone our 2020 outlook is within a range. So we’re feeling increasingly optimistic about that but David you pick up for HIV.

So as Emma said first of all globally overall dolutegravir and dolutegravir based regimens grew 18% in the quarter. I think if you’re going to the U.S. as we showed TRx for BTG overall up to around about 37,000 clearly varies week-to-week but 37K a week. And our market share the way we define it of core and SDR has grown a little bit it’s just above 28% or so. So we're pretty pleased with that, I would say when you drilldown into it, Tivicay particularly looks absolutely rock solid. So we’re seeing almost no switching from Tivicay and indeed some prescribing of Tivicay still into new patients quite lot of Tivicay as we said before somewhere in the 40% to 45% range just with [inaudible] but that business looks very, very stable. Triumeq is a bit more competitive, we are seeing some switching around the edges some of that is undoubtedly going to the competitors, some of it is actually going to Juluca. So there is some switching from Triumeq perhaps not as much as some might have anticipated. As Emma showed, we’re actually quite pleased with the way Juluca has launched after over thousand scripts a week got about 1400 to 1500 physicians now in the U.S. prescribing. And I think that paves the way very nicely for GEMINI and dolutegravir and lamivudine. There is clearly appetite for two drug regime so that's where I don’t think any of those trends are actually that different from Q1 it's really been very much a continuation and I think we’re pleased with that.

Okay next question please.

Michael Leuchten from UBS. I had two questions on the financial side the upfront costs for the restructuring program seem high relative to the savings. So what makes this program different from what maybe you’ve done previously. And then on the free cash flow definition I think you've now moved dispose against from intangibles into free cash flow just your thinking behind that what that means?

So I think what is different about this program is the particular focus on the supply chain and the moment you get anywhere near our fixed asset footprint you end up with reasonably sizable non-cash write-offs. And yes you can either take a view, you never go near those or if you want to confront them and address the overall complexity we have in our supply chain and that’s an issue and that’s basically told you a number of times. We felt that was justified. The cash costs are 400 million against cash cost of 800 million so very similar paybacks to what we've seen in the other programs we've done, but it’s really driven by that particular focus on the consumer supply chain post the Novartis buy-in where we can really get off to that business in a way that we couldn't with our partner. And now a year on with commercial focus being much clearer, R&D in place we can look at the pharma supply chain agency to what we really need to go forward and get both of those in one program that's really why it’s a bit different. And then on the free cash flow all we’ve done is a small tweak to the definition to bring in disposals of intangible assets not businesses intangible assets, because we have the costs and not the disposal benefits whereas on the fixed side we have both in. And I think that the effort just a question of balancing is by 18 million in the quarter and about 40 million last year so it’s not big number.

Next question please.

Emmanuel Papadakis from Barclays. Maybe just on the inevitable Shingrix capacity question. You said you had enough to make to sell 600, 650, figure that you kind of provided us. Does that represent the ceiling on what you can make, and if not, where is the ceiling in what you can make this year and what might be the additional flexibility between now and the end of the year on that?

Well, thanks for that question and I'm also is picking out one that's coming through from [Danny from Axor], as well. So, I won't pick that up for the second time. But obviously we are delighted with the early start to Shingrix. Obviously, it's also in line with that preferential recommendation which was beyond initial expectations. We did significantly mobilize supply and continue to do so, and I'm not going to comment beyond that, confirm the increased outlook of 600, 650. But we do expect to continue growing this business through next year and for it to be a very material contributor to growth for the Company. Supply is a bit bumpy but we're working very tightly with them, CDC, and with wholesalers are particularly focused on that second injection and you know very confident considering we're also looking at the geographic rollout pacing that we can maximize this launch in the year. I don't Luke whether there's anything you'd add to that?

No, I mean it's what you said, it's clear, it's a key growth contributor also for the future and that's why Simon said, we keep on investing and we supply more going forward.

Maybe if I could take the second question. The contingent consideration liability increases a consequence to positive GEMINI study. Is there anything you can tell us about what we should think that might translate into in terms of sales potential?

Well I don't think we're going to give forecast, but I think you can sense from the increase of degree of confidence improved.

And what did really change is the probability of success, because clearly that has gone up a lot.

I think we have a question now on the phone. Emma, if you're ready?

Two questions. In the past, the number of guidance elements have been provided for 2016 through 2020 beyond earnings, but they have not been reiterated so far today. So these include the Respiratory, Vaccines, Pharma, Consumer, and total turnover, Should we assume that all of those elements are intact or not intact since they haven't been reiterated? And secondly, is Horlicks still likely to be divested in 2018 and what impact would that have on earnings if it is divested? Thank you.

Thanks, I'll only take the earnings, but the short answer to the question whether all the other guidance elements are intact, is, yes.

And on Horlicks, I think it depends when it happens. The plan is still to get it to a conclusion during the course of 2018. But obviously we need to balance that, we're making sure we get the right price. So, I think when we conclude that, we can give you some more specific help on that.

It's Keyur Parekh from Goldman. Apologies if you addressed this in your opening remarks Emma, but there's been some recent press speculation about the broader structure of the Group. As you go through kind of the Shingrix launch rest of the world, just help us think about conceptually would this be a good time for you to think about something different or is - as is kind of a good place to be in for the next couple of years?

So, thanks very much, Keyur, but I'm not going to repeat what I did say in my introductory remarks, which is, the Board's position on this is unchanged. We like the structure of the Group for its continuity and balance of the cash flow, as long as all three businesses continue with strong capacity and have sufficient access to capital. And on that basis we're unchanged for now. Thank you. Next question, Andrew?

I was going to ask this question to the Chairman, but in his absence it's going to go you. It's Andrew Baum from the Citi, by the way. So, he's going to be indicated and understandable willingness to reassess the Group structure in light of the context which you alluded to. Does the Board also remind us also related to reassessments of the physician engagement policy with GSK as currently running with, you recently hired a new General Counsel, there's several of us who think it's uncompetitive versus your peers. I'm going to suspect the same maybe true of your internal staff. So, whether there's any intention to renew that and what it would take to renew that? And then a second question for Simon, that relates to business development. You ceased R&D in your dermatologic creams area most recently. Given your in-market sales are substantial, and there are now some private equity players coming in for picking up some of these established brands. Are there potential opportunities to generate capital to reinvest elsewhere in the business particularly within derms?

Thanks very much Andrew. I'll take the first question. And it's an important one, we have been investing heavily as you know internally in terms of all medical engagement capability, and we do continue to look at this. Well, we look at it through the lens of very much what is in the interest of the patient in terms of new data coming through and also what's going to help the HCPs that we work with especially as the invasive pipeline develops. What matters to us is patient interest and transparency. And on that principle, we continue to look at it but no news today.

And on the assets side, I mean I think as we've said a number of times. We continue to review the established pharmaceutical business to see whether there are better opportunities in disposing off those assets. Generally the portfolio is a very strong cash and margin contributor. We've got number of disposals that are washing through the numbers this year which add some genericization which as we go into 2019 and beyond reduce the drag significantly. But I think we're very open-minded where there is real value, but we are now managing that business much more discreetly as a distinct entity to lever margin and cash into funding some of the other objectives that we've described today. So, typically when we benchmark those alternative proposals, they don't stack out very well but occasionally they do and some of the disbursals were made to ask them would be good example of that. But we keep looking, and if a good value opportunity comes out we're very open minded.

The bulk of the value we can create is one through more efficient and focused supply chain, better forecasting, and then overlaying that a greater concentration of commercial effort on a smaller number of products because we're quite disbursed in markets such as China and India. And I think there's a fair amount of work that's advance that should you benefit over the next couple of years.

We're going to take a question online now from [Danny at Axor] on 2020 guidance.

So, Simon, perhaps you can answer this. The question is related to what delivers and drives us to get earnings to the upper end of the range in 2020 in terms of 2020 outlook?

Well, I think that we've highlighted a couple in particular in the upgrade that we gave for 2018. In those we certainly expect to continue to play significantly as we go through to the 2020 period and complete that outlook that we gave back at the time we closed the Novartis transaction. But alongside that, continued growth in our new respiratory products, growth in the meningitis franchise, and as I just touched on it in a very different contributions for some of the established portfolios as well coupled with continued costs drivers and operating leverage and good focus on the bottom half of the P&L, put all that together along with the improved cash conversion and I think you can see how we get to the 2020 outlooks we've previously given, and fund a very significant step up in R&D spend that we're planning to put behind the new approach to R&D, as well as supporting some of the commercial priorities that we've identified. So, it's really more of the same, as that kind of probably the one line answer to that.

Thank you. Next question, please.

It's Kerry Holford from Exane. Two questions please, firstly on Shingrix. Can you confirm whether have you started your DTC campaign on that yet? And given the speed of the ramp, do you think is Vaccine could now be more profitable earlier than you previously anticipated? And also can you just remind us which ex U.S. regions you've now launched the Vaccine in? Through allergy is my second question, and more broadly into respiratory. So you just spoke little about previously about commercial prioritization. Can you detail what that actually entails? Have you increased the number of reps, and can you talk about the relative positioning in that promotional process of allergy, Anoro, Breo, and how you're now promoting each of those products to doctors?

So, since Luke is also leading the execution of Shingrix around the world, why don't you pick up both of those questions, please?

So, the good news is we've not actually had to commence any DTC. We did originally have quite a significant investment assigned for DTC but as you're no doubt aware, the press coverage, New York Times, Washington Post, et cetera has meant that we have a need to engage in that at that point, which is mainly we've been able to deploy that that effort to products like Bexsero. Outside of the U.S., we've launched in Canada. It's very interesting, so the NARIET recommendation in Canada is not as strong as the U.S. recommendation, but what's striking and certainly just come in, what's striking is we've a 9 fold increase in the number of GPs who are regularly writing Shingrix, and we've got a mark that was declining at about 30% for the last 3 years, Zostavax is now more than a 100% growth. So, the demand is there and I think that's encouraging as we look into Europe and other places. The other place that we've got a very narrow launch is in Germany and that's very deliberate. We want to establish a patent of use in a subset of patients. Germany of course it's really influenced by the presence of STIKO and the recommendation with STIKO. So that will be longer and then we have a small allocation going to Japan for the same type of reason there. In terms of Trelegy, and I think this is a key shift in the culture. I mean, Simon, has made the point in terms of reduction and resources scenarios. Historically if we adjusted sales force because that's where the cost tended to come out because as people were visible you could do that. What we've tried to do to fund Trelegy and really be quite bold in terms of our investment on Trelegy is to reduce the back office and reallocate those resources. So, the positioning of Trelegy, we're going after people who have had one or more exacerbations in line with the label. With Anoro, we positioned it for COPD patients who are symptomatic and if you are exacerbating there's Trelegy, and that's essentially the strategy in a very simple way. We split the teams historically in some markets, we'd had people selling two or three products. The net result when we looked at market research was physician confusion, which is not the objective. So we've split that, we're trying to avoid that at all costs. We split that and then consistently when markets launch, I want almost the entire sales force on Trelegy at launch so that we really inject energy around that. And you can see those uptakes whether you look at the U.K., you look at Germany, you look at Australia, Canada, that's not fully reimbursed yet, but if we look at the patient program, again, these trends are very strong and now we just need to keep that going.

Laura Sutcliffe, Berenberg. Another Shingrix question, please. Clearly Shingrix is going very well. Its more expensive in some of the other more commoditized vaccine products, we've not seen any DTGs some of the reasons you just mentioned. So, what are you thinking about in terms of margin in the vaccines divisions going forward and when we might see some of the benefits of that?

We're not going to get into a breakdown of margin by product, but I think we've very clearly and consistently had a target of plus 30%. And also to chariot that we would move the margin around quarter-to-quarter depending on when the investment requirements were, when most acute, and we've seen that this quarter. But if you look at the shape of the business with the growth drivers we've got meningitis, Shingrix, and the established vaccines business, there's nothing to say that we couldn't deliver a sustained performance in the 30% to 35% range that we typically have for our own business pre the acquisition of the Novartis assets historically and that's probably the right set of guide.

Just like you've seen the results, there is quite a bit of pressure for DTPA in Europe, as well as Synflorix in emerging markets through [Gabby]. So that's - so I didn't answer that in your question.

Jo Walton from Credit Suisse. Two questions, please. If we look at the gross-to-net in the U.S., you can see that Respiratory is one of the biggest areas of rebating. Intrigued as to what you think might happen if rebate were rolled back and you had to move to some sort of net pricing, I mean effectively your speculation, your war gaming, whatever it might be, how you think that might impact you because rebates are a big part of the Respiratory business.

They are, and then I'm going to ask Luke to comments as specific we are not going to be in the business of speculating certainly and not speculating publically on what's going to happen as the follow up from blue print, but you're right. On that pricing - if you look on that pricing in Pharma, already we had CAGR at 5 years, one last year, one is 5 in fact this quarter a little bit more than that. So it is a therapy area under the degree of pressure, but that's why we are so focused on the new respiratory because it's quite focused on ICS/LABA. In terms of policy, we have obviously responded ourselves to the request we are very supportive of anything that's going to still encourage innovation, but actually help with the out of pocket for patients and bringing most transparency to that huge differential between gross and net is actually a good thing. We wouldn’t necessary support - who based - removed a complete label we do think that’s we’re transparency the value chain is a positive move. I don’t know Luke whether you want to add anything in terms of…

Yes, I would just add the discussions are comprehensive and there are some clear markets for the administration out there in terms of rebates sort of safe harbor, and we’ve been involved through pharma in giving our views you can actually read our submission on the AAHS website. And I think to Emma's point it's too early to say, but I would expect that there will be some changes in the structure.

And the second question it’s a consumer question in a different way. I wondered if you could just rephrase for us what synergies you think there are between pharma and consumer. Are we moving to a more consumer led prescription market where some of your consumer insights are valuable. I mean understand that you want to keep businesses that perform well in their own right. But the debate is how much synergy there is between any of the individual businesses that adds more.

So I’ll let Brian talk about the synergies that he sees from the consumer and the web, but I’ll just make a couple of points on the reverse side of it. First of all the Shingrix launch is a consumer launch. Most of its distribution is through the retail environment in the U.S. where we are very familiar operators. I think its 60% is that right so the actual 65% of the distribution. So lot of the planning initially around how to launch this and has been most would agree a good start. And was actually in partnership with the consumer team effectively you’re asking and adult to self present to go and printout themselves it’s not a baby that's literally carried in whether they like it or not. So it is we do see that as being a relevant capability. And the second thing it’s been very interesting to me from and this is I think - we would agree a long-term view. When you think about the deal we announced today with 23, which is we’re potentially extremely exciting in terms of identifying these genetically validated targets. And therefore addressing is fundamental challenge in the industry about probability or success. It also very interesting from a consumer empowerment point of view, whether you’ve got 5 million people that sign up now there will be 10 million very shortly who are massively motivated around their personal health and 80% of whom at the moment I think that’s correct are voting for being able to participate in research. So there is I think over the long-term and we shouldn’t overstate this we will start to see patient power emerging a bit more strongly. The only industries where the end beneficiary is neither in charge of the paying or the choice that's involved and over time with the transparency of information and more value demonstration I think it’s going to be relevant. Now that does not mean we don’t need to prove the other criteria we’ve laid out as critical to a group structure right now but the whole board is supportive but Brian may be you can talk about.

Yes may be just quick on Shingrix both Luke and I engaged quite a bit on that and our team is actually work quite closely on the Shingrix plan. We actually transferred some folks from the consumer marketing group into Luke's group. I think the classic advantages we've had so far is we talked about Flonase which is a $5 million product in the U.S. We switched at OTC £200 million in 12 months and now we’re actually launching that around the world and we’re seeing good growth on that. Most recently the Pharma business did quite a bit of work on our CRM program that their engagement with HCPs is obviously their expertise. We do a lot of that with dental professionals and doctors around the world. We were able to take that off the shelf and launch it in 80 countries around the world last year something we could never do if not part of the group structure. So we continually look for those opportunities to take advantage of being part of GSK and they’re there.

And I’d say the next one is Bexsero, I mean the upside of having a delay and the Shingrix availability ex-U.S. is so I think we can do a lot more of Bexsero particularly in Europe where I think initially we had supply constraints and then of course we started to think well is this a U&V market. I think the conclusion we reached right now it’s going to be private market and that again lends itself to the skill set that’s Brian team and we have another exchange going on that dimension.