By Ludwig Burger
(Reuters) – Strong cash flow and growth will allow GlaxoSmithKline’s (NYSE 🙂 consumer products business to face a higher debt burden after its planned separation next year, the head of marketing for GlaxoSmithKline told Reuters. the division.
Tamara Rogers (NYSE :), director of marketing for GSK Consumer Healthcare, said in an interview with Reuters Marketing Interactive Week that the company would take the increase in debt in stride due to its cash flow outlook.
“As a consumer business, we have very good cash flow, so we hope, with the growth rates that we anticipate, to be able to handle that load,” said Rogers.
This would allow the division “to make the decisions we want to make about where to play. We are in sectors that have very high growth,” Rogers added.
GSK is due to update investors on plans to split into two listed groups, one for pharmaceuticals and vaccines and one for consumer remedies, on June 23.
The consumer group has 10 billion pounds ($ 14.2 billion) in sales, about 30% of the group’s total, and as part of the split scheduled for next year, GSK has said the unit will take on a net debt worth 3.5 to 4 times its value. Adjusted annual profit before interest, taxes, depreciation and amortization (EBITDA).
That’s a 2x increase for all GSKs currently.
Proceeds from the recapitalization of the consumer division will be paid to help GSK’s remaining pharmaceuticals and vaccines business reduce net debt to a ratio of less than 2, as well as Pfizer (NYSE :), which owns 32% of the entity.
Rogers said there is ample room for the consumer health business to grow from its number one position in the industry. Although ahead of Johnson & Johnson (NYSE 🙂
For now, the group will focus on opportunities to grow in its established categories, which include oral care, pain relievers, as well as allergy relief sprays and creams, both organically and through acquisitions.
“It is a market that is more fragmented and we believe there is a lot of room to grow in the categories in which we already participate,” said Rogers.
“We’re always looking for M&A opportunities, but they have to be ones that really align, scale, and have a really strong fit with our business,” Rogers said. Its vitamins and minerals for preventive health care, such as the Centrum brand, have seen an increase in demand during the coronavirus pandemic and Rogers said he expects preventive care to become a lasting trend even as COVID-cases decline. 19.
For more information on Reuters Marketing Interactive Week, click here: https://reutersevents.com/events/marketing-interactive-week
($ 1 = 0.7068 pounds)
Fusion Media or anyone involved with Fusion Media will not accept any responsibility for loss or damage as a result of reliance on information, including data, quotes, charts, and buy / sell signals contained on this website. Be fully informed about the risks and costs associated with trading the financial markets, it is one of the riskiest forms of investment possible.
Calling All Calgary 2SLGBTQ + Artists: Muralists and artist teams invited to submit entries for inclusion in this year’s Shaw Pride March celebration Shaw Communications, in association with Calgary Pride, Calgary Arts Development and the City of Calgary will once again celebrate Calgary Pride with public art installations at all four corners of Central Memorial Park, the site of the city’s first Pride rally in 1991.