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* Marketing head says will focus on established categories
* Says growth profile will support higher debt burden
* GSK sees lasting consumer taste for preventative products
* Rogers speaks at Reuters Marketing Interactive Week
By Ludwig Burger
June 9 (Reuters) - Strong cash flow and growth will enable
GlaxoSmithKline's consumer products business to cope
with a higher debt load after its planned separation next year,
the division's head of marketing told Reuters.
Tamara Rogers, Chief Marketing Officer for GSK Consumer
Healthcare, said in an interview for the Reuters Marketing
Interactive Week that the business would take the increased debt
in its stride because of its cash flow prospects.
"As a consumer business we have a very good cash flow, so
we're expecting - with the growth rates that we are anticipating
- to be able to manage that burden," Rogers said.
This would enable the division to "make the choices we want
to make around where to play. We are in sectors that are 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 another
for consumer remedies, on June 23.
The consumer group has 10 billion pounds ($14.2 billion) in
sales, about 30% of the group total, and as part of the
separation slated for next year, GSK has said the unit will take
on net debt worth 3.5 to 4 times its annual adjusted earnings
before interest, taxes, depreciation and amortisation (EBITDA).
That is up from 2 times for all of GSK currently.
The proceeds from recapitalising the consumer division will
be paid out to help GSK's remaining pharmaceuticals and vaccines
business cut net debt to a ratio below 2, as well as to Pfizer
, which owns 32% of the entity.
Rogers said there was ample room for the consumer health
business to grow from its number one position in the industry.
Though ahead of Johnson & Johnson <J&J>, Sanofi and
Bayer, it only commands a share of about 7% in the
global market for over-the-counter remedies and vitamins.
For now, the group will focus on opportunities to grow in
its established categories including oral care, pain killers as
well as sprays and creams for allergy relief, both organically
and via takeovers.
"It's a market that is more fragmented and we believe there
is plenty of headroom for growth in the categories that we
already play in," Rogers said.
"We are always looking at M&A opportunities but they have to
be ones that are going to really align, augment and have a
really strong fit with our business," said Rogers.
Its vitamins and minerals for preventative healthcare, such
as the Centrum brand, have seen a surge in demand during the
coronavirus pandemic and Rogers said she expects preventative
care to become an enduring trend even as COVID-19 cases drop.
For more on the Reuters Marketing Interactive Week please
click here: https://reutersevents.com/events/marketing-interactive-week/
($1 = 0.7068 pounds)
(Reporting by Ludwig Burger;
Editing by Alexander Smith)
