Okay, good afternoon, everybody. While you all grab a seat, I'm going to make a start. Thanks very much for joining us for the Q2 results of GSK today. I'm sure you've all got the press release, and there's a book of the various slides that we're going to present just in a few minutes. I just like to make a couple of introductory comments before I kick off properly. First of all, just to introduce to you, we have got some of my colleagues from the executive management team of GSK here in the room and maybe they can stand up as I introduce them. Abbas Hussain, who runs our Emerging Markets Pharmaceutical business; Deidre Connelly, who runs our U.S. Pharmaceutical business; David Redfern, who's Chief Strategy Officer for the company, also looks after Stiefel and the ViiV business; Moncef Slaoui, who's the Chairman of our R&D Business and also is taking over responsibility for our Global Vaccines business; and of course, I've got Simon Dingemans here at the front with me; and Phil Thomson, who is our Head of Global Communications and IR. So they'll all be here. If you don't hear from them during the session, you'll certainly have a chance to chat with them afterwards when we finish. They'll be delighted to spend a few minutes with everybody over there with a cup of coffee if you just want to nail some of them against the wall and really interrogate them. I've brought a few extras for you. So great a opportunity for you to see them. Good chance for you as well to hear from Simon really for the first time properly as he spent the last 6 months really getting to grips with the organization and really challenging a lot of what we could…

Okay. Thanks, Andrew. And before I start, I just wanted to add my particular welcome to all of you as I think for many of you, this is the first chance we've had to meet face-to-face, and I'm very much looking forward to getting to know all of you a bit better over the coming months. We'll turn to the quarter in a minute, but before we go there, I wanted to take a few minutes just to really describe for you, as Andrew said, my long-term priorities for the group, and in particular, how I'm translating that into a new financial architecture that we're rolling out across the group. And that's going to drive my overall financial strategy for the group, but it's also going to drive our planning priorities, how we think about allocating capital and, in particular, how we report going forward, so that you can see more clearly and more transparently how we're going to drive the group going forward, how we should be measured and what are the kind of key performance indicators that we're using to monitor the business going forward. When Andrew and I were talking before I came on board, we could see clearly a number of opportunities to drive the strategy harder and, most importantly, to drive improved returns from that strategy. And having been on board for about 6 months now, it's quite clear that those opportunities are very real, they're deliverable, but they're only going to be accessible if we take a different approach, and that's really what my financial architecture is about, is making sure that those priorities are clear to the businesses, that we drive them through the planning process into how we drive the business going forward, that we allocate capital according to those principles and…

Thanks, Simon. Great. Thanks very much. Okay. So let's open up now to Q&A, please. Yes, go ahead.

Mark Dainty from Citi. Just a couple of financial questions, actually. The GBP 300 million in savings you have identified for 2012, should we assume all that flows through to the bottom line or some is reinvested? And just on working capital, if I look at some of your peers, in inventory, they've sort of targeted around a 90-days inventory outstanding. Is that something that you think is achievable given your business mix, Advair, complexities et cetera, et cetera?

So let me ask Simon to respond to the first, and then I'll pick up on inventory. So yes, Simon.

I think as I said in the presentation, the GBP 300 million and how we'll treat that going forward will very much depend on where we see the best returns. I think, however, you should not expect all of it to drop to the bottom line. We used a measure of around 40% to 50% in terms of the preexisting OE benefits. We'll take decisions going forward as those benefits are realized.

And on working capital?

On working capital, I mean, remember that our mix of businesses is quite different from many of the peers at the bottom end of the range. And in particular, our Vaccines business has very long lead times, which is always going to mean that where we can get to will probably be some way back from them. Equally, we think about the risks quite differently. You've got to trade off what you do on the supply chain versus what you do on the way through in terms of delivery to customers. So I'm not in a position where we're going to give targets at this point, but I think there's clearly a significant amount that we can move forward from.

There's no question, as far as inventory's concerned, we absolutely recognize there's tremendous scope to bring that down. We're going to be just -- we've got a simple target, particularly a benchmark target from outside with very different business shapes would be created. I mean, if you just look at vaccines. Vaccines, I'm thinking, has something like a 6 to 7 month release time, post manufacturing. So the minute, you have a Vaccine business, you automatically have a big working capital number compared to somebody who doesn't. Equally, you work with biological products. These are processes where you're more likely to have variations because it's a biological process. Again you want more inventory to protect yourself from the unexpected biological variation that might come along. So you're going to see different numbers to the benchmark, but it can come down materially from where we are now. So I think over the next 2 or 3 years, you should expect to see us bring that down aggressively. Last 2 years, we focused very obviously on receivables and payables. We made good progress on that, and it's been just in time in terms of Southern Europe. So we look at our exposure to the Southern European states, it's very much down from where it was 2 years ago. We've done that, now we've got to crack inventory. Thanks, Mark. Yes, go ahead.

It's Graham Parry from Merrill Lynch. And quick question on Promacta. This is also for -- you said that it was positive data, and you talked about reducing or increasing ability of patients to take interferon. Can I clarify, did you actually hit the primary endpoint of an SVR response rate on that trial?

Moncef, do you want to specifically answer that?

Yes. [indiscernible] significance that make you feel very confident.

Second question is on Alto. You talked about recruitment being complete for that. I just wondered what your expectations for first stage read out would be? And then the final question was just on the GBP 300 million of savings, just wondering if you could you give us a bit more color on exactly where they're coming from? You talked about Stiefel but that go on there as well.

On Alto, as you know, this is a event driven client, so it'll be totally inappropriate to predict. Let me tell you, I hope it's going to be as late as possible, because it means the effect is bigger, but the recruitment is complete.

On the GBP 300 million, I think if you worked on the assumption of the mix being similar to where the existing OE benefits have come from, which is roughly about 50% from COGS and the rest split between SG&A and R&D, that wouldn't be a bad measure.

And is there any color on division area that was coming from, is that predominantly Pharma?

No, I think it's coming out of all of the areas. I mean, take the consumer business, for example. I talked about the sort of the restructuring that we're going to have to do in that business following on from the tail disposal. That -- part of that process is about aligning the manufacturing chain much more to the ongoing business. So in consumer, there will be a number of savings in manufacturing and distribution, in logistics and in the front end. So it's across the board. But it's indicative of actually sort of where we think we can unearth more savings across each of the categories we've already been working on. Luisa Hector - Crédit Suisse AG: Luisa Hector from Crédit Suisse. Is there any more color you can give on the tax rate and how you can achieve that 2 percentage point benefit? Any particular driver? What is the mix?

I don't think there's any one particular driver. It is a mix issue and it's a geography issue and it's about aligning our cost base and our profit flows with the changing shape of the group that Andrew described. And that gives us a number of different opportunities that add up to the 2%.

I think what's also very encouraging on the tax front as we talk about the next 3 years and the way you've seen. We think then beyond that, you then move into an area where things like the U.K. patent box start to become enacted. So there's clearly opportunity for us to continue to put pressure on the tax rate going out into the future beyond. Now that isn't what drives the first 2 percentage points, but it's a further opportunity we've started to come in. And I think after very many years of seeing that tax rate as pretty stubbornly stuck, you're starting to see a number of ways in which we can get traction on it, which is for over potentially quite a prolonged period.

Eric Mobits [ph] from Goldman Sachs. A couple of questions. One on the business mix and the pressure you might see on margins because the businesses that are growing regionally are at low margin, significantly low margin than say the U.S. or Europe. So how should we think about that? And then secondly, in your legal disclosures, you talked about settling the standoffs on European Advair litigation. Can you just talk about how that's maybe changed your view or not on the threats in Europe?

Let me take the second and then maybe Simon, you talk about the margin. So we'd come to an agreement with Sandoz. This is on the so-called -- it's actually on the SBC element of the patent because the patent had expired in what was dated 2010, but in some countries, mostly in Southern Europe, there were supplemental extensions. This patent had already gone in a whole bunch of countries and we just took the view that actually it was no point spending money in litigation on this point. It was just a marginal call, we took it. We don't think it changes anything. Remember this patent's been absent in the U.K. since 2004, and then in other countries subsequently. So we've had a very long period of time without this patent. I'll say something they've said on this stage and similar stages so many times. It's never been about the patents. Never. And it's always been about whether or not people can manufacture the product to a standard #1. And then is that standard substitutable or not. And if the patents were there originally, but actually it's never been about a patent issue, which is why I think when you look at the U.S., nobody's ever filed a paragraph 4 against the patents in the U.S. But again, it just gives you that same sense that it's about whether they can make it and whether what they make is equivalent or not. We believe that is not going to happen in the U.S., certainly not as fully substitutable generic. It's hard to see even a branded generic in anything other than the medium to long run. In Europe, we're going to see, as I've said many times, probably sporadic generics. We'll see what comes along and we think it's very, very unlikely to have a single European scenario. We think it's going to be very different market by market. And who knows how that plays out? But we've dealt with that in the past with many different products. So as far as this particular settlement is concerned, we see it has no impact on what may or may not happen.

And on margin and mix, I mean, you're right that obviously a lot of the growth that we've seen has been in some of the lower margin businesses in the group. But at the same time, look at the overall operating profit performance. That's where you get straight into the kind of cost reduction efforts as well. But we're playing off the mix versus those cost reductions where we invest to drive overall operating margin and overall operating profit. We're not driving them individually by business because ultimately, operating profit is what's going to turn into earnings per share and therefore into cash flow. So I think expect to see us doing more of that as we think about kind of where to invest and where to change the mix of the business. But you've already seen us doing it over the last couple of years, and the decline I showed you in that chart was really most heavily weighted to the beginning of the chart. And I think we're going to be focused in that way going forward.

I think as well, there's a build on that, what we've tried to do, and I think you see some of that in things like core business services or the corporate costs, those shared services, we spend 20% less today than we did 3 years ago on our cost of administration, so things like HR, IT, those sorts of things. What we've really done is we've tried to unhook those cost rows from the sales line, and the same is true of R&D. You're not going to hear us forecast in the future R&D as a percent of sales. We'll talk about it. If we talk about anything, we'll talk about absolute number of pound notes because actually, we don't think R&D should grow just because the sales line grows. Now that's sort of been a bit meaningless, while the sales line hasn't been growing. Once the sales line starts to grow, the separation of those curves is going to become very apparent, right? So as long as we can stick to that decoupling, if you will, of some of those big areas, that's going to create margin opportunity. Some of that, plus the other things that Simon's described in terms of cost reduction and all the rest of it, some of that will end up being reinvested, some of it will go to drive the operational leverage that we anticipate coming through, and it's going to be turbocharged in the first couple of years by further leverage, below OP but before EPS in the shape of tax and interest. And that's really the way where trying it. So rather -- what you're going to get from us is a bit less detailed forecasting of cost rows and probably a bit sharper target in around the OP level, and then where we're going to ahead with in terms of overall margin.

Florent Cespedes, Exane BNP Paribas. A few quick ones. You deliver on the cost control, we believe that your next challenge will be on the research portfolio. When could it be possible to have an update on the late stage portfolio? Could it be possible to have towards the end of the year when we have the DPUs update or maybe later next year? And a follow-up on the DPUs, you have to understand that some units will disappear and maybe some new ones will be created. Could it be possible to see new ones beyond the 7 core areas? And maybe last one, on products, on the respiratory, could we have a quick update on the antagonist [ph] program in the U.S. and where you stand regarding the discussions with the FDA, if there is any new potential safety clinical trial there?

Okay. So as far as an update on the pipeline, as far as -- so remember the DPUs is really is the early phase discovery activity. So what we do or don't say about the late phase is kind of independent of what might or might not happen with the DPUs. And we'll certainly give you an update of what the conclusions are of the DPUs. We're not going to tell you exactly which targets we'll research and what we've stopped, but we'll certainly give you a feel for how many closures, how many doubling up, how many status quo decisions we took, how many starts we took. And we've got -- one of the great things about this whole process in discovery, is we've got literally dozens of scientists in the company putting forward their ideas for new DPU opportunities. It's kind of creating that innovative vibe inside the organization again, because they see these chances to get -- they get their chance to do what they've always dreamed of. Now, if they don't do it well in the first 3 years, then they're at risk to get stopped. But there's a tremendous atmosphere, so we will update you on the shape of those conclusions. Now, as far as the late stage is concerned, we will come to you with an update on that pipeline. And it will be somewhere, it will be either the end of this year or the first quarter of next year. We haven't quite nailed down exactly when it's going to be, but somewhere in that window. And the reason why we're not rushing that is we want to have a reasonable amount of data on the key assets before. There's no point coming in and talking to you and saying we've got 2…

[indiscernible] Just a question on your respiratory portfolio and especially the new fixed dose combination of LABA/LAMA that you want to bring to the market, I mean you were with Novartis to bring this new fixed dose combination. So what's your strategy? Did you plan to file [indiscernible] the 2 components, the LABA/LAMA with your new device? And also, with regards to the device, how this generally differs from discussed? And finally, just on the share buyback program, what should we expect going forward not for 2011, but going forward?

So share buyback for 2011, we're going to be at the upper end of the 1 billion to 2 billion range. We haven't given any numbers out for next year other than to say 2 things: one, the initiation of the share buyback program was the beginning of a long-term program. So I think you should anticipate more share buybacks. And secondly, we said that when we dispel, assuming we can get a price for our consumer tail, which meets what we expect and is a fair reward for our shareholders, then from the net proceeds of that will also go back to shareholders, potentially through further share buybacks or I suppose conceivably special dividends but one or the other. So that's on that first part. As far as the LAMA/LABA this is the Zephyr [ph] program. I'm not going to go into a huge amount of detail of what we're doing in terms of our registration strategy. What's become very clear in the last 3 months is that there's a really good chance we can be first to market in the U.S. with this product. And that's obviously we're going to chase that as hard as possible, and we're not going to give our competitors any clues. Now, in terms of Gemini. Gemini is a very interesting device in a couple of dimensions. First of all, it builds on everything we've learned from discus. So all the key bits of Gemini are evolutions, if you will, of what we know works and we can manufacture at very high capacity on discus line. So in a way, it's a bit like developing the iPhone from the iPod, right? You learn a lot about the technology in one product and you make it reliable, and that's how you make the new thing super reliable. That's really important because we know we can get this thing up and running. We've already got lines up and producing huge volumes. The other bit that's very, very different is if you look in the discus, what you'll see in the discus is the drugs are premixed in one blister, whereas in Gemini, there's 2 different blisters. So that massively simplifies the whole development challenge, which is why we've been able to accelerate so many drugs in parallel. And why I showed you today, just the scale of what's coming. It's partly because we sold one of the really difficult problems, which is compatibility of molecules, by not having them together in the device. And that created a tremendous amount of technical opportunity to move a lot of things in parallel much more quickly than anybody thought we could move.

Michael Leacock from RBS. Two questions. Firstly, if I may, in terms of the U.S. sales versus incentive [ph] scheme, I wondered if perhaps you would be able to comment. In what outcomes are you expecting from the sales reps. What sort of metrics are being targeted to deliver and how will we know that they're a success. And secondly, [indiscernible] mostly competitive landscape like for deals, yes? I think we're expecting some of a bit of follow ons from the other way around at some point. Can you just give us an update on that landscape? It would be very welcome.

Okay. Deidre, do you want to make a comment on the sales force incentive program?

Yes, in terms of the sales incentive, what we've changed is previously, most of the incentive was dependent on additional scripts at the doctor level. We have devised a program that now requires that our sales professionals have 3 things that they need to meet on metrics. One is product knowledge [indiscernible] knowledge, which enables them to have a more sophisticated discussion with their customer. Second is business acumen, so the investment of their resources, both in time and dollars. And third, is the total sales and profitability of the region. So there's still a commercial sales incentive that's been pulled up to the region. Those are the three parts of incentive plan.

And the way you're going to know if it’s working is sales are going to go up. I think I had a fascinating, not long, maybe about a month ago in Chicago, I met with a bunch of our sales force. And it was really, and I was just -- sometimes you go there over the last few years and people will tell you all about stuff that's happening. And then it was very interesting just to hear the kind of shift in perception of our U.S., people on the front line. And one of the things that really came out from that conversation was actually how positive this was. So one of the quotes that really struck me was the representative said, "It's amazing now. I actually helped my colleague get their appointment because I know it doesn't matter if they get the script or I get the script. Whereas before, I'd do anything to stop them getting the appointment because they might have gotten my script." Which actually, as a company, is just nuts, right? So I'm delighted that we're the first company in the U.S. to be doing this. I think this is really going to change the way that we compete. I think it's massively changing the way customers see the company. But also, of course, by the way, rightly or wrongly diminishes one of the things our critics think is wrong about the industry in terms of what's driving the pressure in the system. So by -- we're trying to mitigate some risks in the downstream, we're also creating a better relationship with customers. I think we're going to create a much more cohesive team orientation in the organization and ultimately, that's going to lead to better customer relationships and better sales. ViiV. So when's the next ViiV going to be, David?

I mean, firstly on ViiV, I should say it's going incredibly well. So we're very pleased with the focus that the team under Dominic [ph] have brought, and you can see that actually in the sales numbers, Epzicom up 7% and sales entry up 37%. So a real acceleration in the 2 promoted brands and pipeline progressing very well and we have the data from the registration studies on the integrated inhibitor next year. I mean, I think the short answer is we're absolutely open to those sort of structured deals. ViiV as I’ve said has been a very good experience and it certainly possible that more could follow. I would say, having been involved with ViiV right at the beginning, these are very complex deals to put together technically. There's an awful lot of tax issues, there's an awful lot of separation issues. And you do need quite a large number of stars to align. You need a sort of symbiotic balance between the 2 companies in terms of what they're thinking and what they will bring. And it's not always the case, but we're certainly open to it and we'll see down the track.

Mark Purcell from Barclays Capital. Two questions. Firstly on respiratory, could you help us understand what you believe the impact of Seretide generics is going to be from a pricing perspective i.e. how reference pricing might change across Europe, how pricing might change in emerging markets, et cetera, going forward? I'm thinking about this from 2 aspects. One, the pricing of traditional respiratory medicines as we know today, and then secondly, looking at the data coming through in sort of Phase IIb at the moment in your new mechanisms, what you have to show these new products to gain pricing and value. So for a CPD drug, do you have to show a 25%, 30% exacerbation benefit, do you have to show mortality benefit? That's the question. And the second one is on productivity. With due respect to what you've said already, I think on the gross margin, historically that's how it was to keep the gross margins flat x royalties going forward. I just wondered if that is a sort of a 1,000-foot goal that the company still holds. And I think on G&A, correct me if I'm wrong, I think it used to be 8% to 9% of sales. So I understand what you're saying in terms of sales reaccelerating and you wanted to get to sort of mid-single digit range where some of your competitors were. So could you help us understand where you are now? You were at 8% to 9%, where are you now to give us some shape of how that's changing?

Sure. So in terms of the margin structure, we're still targeting to bring down that G&A rate, and we're on track to do that some time over the next 3 years. So that's quite a punchy reduction and you certainly need some sales growth to create the oxygen to allow you to -- it's very hard to take 50% of something down without any kind of sales growth. So absolutely we're aiming to do that. We continue to drive toward it. We've done, as I've said already, we took 20% of our corporate infrastructure costs out in the last 3 years where a lot of the leverage comes in the next few years is things like the ERP platform, our first deployment of the ERP takes place in a couple of weeks. So that moves very quickly then to put the whole group on to a standard platform across the organization. We continue to take out seniority across the company. So this year, I think we have something like 10% of Vice Presidents have gone in terms of the upper echelon of the organization. Why is that important? Because the VP is the first who commissions all the costs in the organization. So if you can keep your upper command relatively tight, then you take away an awful lot of cost and complexity underneath. So that goal is still there. In terms of COGS, the challenge on COGS is we've got price pressure, mix pressure, so particularly Avandia and generic dropping out and royalties coming in. So whether or not we will be able to hold that COGS line into the far future, I think we can get pretty close, but I think we're not going to guarantee it. One of the reasons why we say, let's focus on that…

James from the CLA. Just a quick question for Simon on the capital allocation policy within the group that he's talked about today and how that actually works in practice. I just wondered if you could give us a bit more color on how you will control that process within the group going forward? And to what extent is the genuinely new methodology for you?

I think there's a couple of elements to that. As I said at the end of my presentation, we're in the process of rolling out a new planning process across the corporation to really kind of build in the metrics that we're going to use and make sure that those are going to be applied consistently. So how is that going to happen, that's how it's going to happen. We've also changed the metrics so that we're using, going forward, a CFROI benchmark that will allow us to compare between different projects and different investments, whether it's in sales force or in capital allocation or capital projects that we can kind of use across the board. It also focuses on the cash returns that are being driven out of that. And that is a shift from where we've been in the past, where we view similar metrics but perhaps more of a balance of NPV and IRL [ph] type calculations relative to ROIC which has largely been applied to M&A going forward. So consistent capital allocation benchmarks across the business is how we're going to make that happen. And already, Andrew and I had a session last week on this year's capital spending projects where we've been through kind of the largest of those and we'll be scrubbing down the next batch in the coming weeks, and then we'll be going to the planning process over the summer, then all of the businesses are being asked to put forward capital expenditure plans as part of their plan, which they've not been asked to do before. So those are a few of the concrete changes we're making.

I think also just to summarize how I think things are -- have already begun but are changing now is I think the finance organization under Simon's leadership is going to be much more hands on into the guts of the company. And we had a perfectly good finance organization, but it was more of a keep in school kind of finance organization. I think what you're going to see is a much more -- Simon's going to role model it obviously at the top. But as he said, through some of the key appointments we've been making and where he's inserted people deep into some of the key bits of the company, what we're really trying to make sure is that finance is really part of the driver of the future, not just simply checking what happened yesterday. And that's a very simplistic way to describe it, but it's very fundamental. And obviously, a really positive shift. And it's going to create an awful lot of value and opportunity in the business, because really what you're looking at in this business, it's all about making sure that the next dollar gets spent on the best return and opportunity. And clearly, as everyday goes by, that opportunity looks slightly different and we need to make sure we're on top of that to get the absolute best return.

It's Mark Clark from Deutsche Bank. A question for Simon on core EPS. I'm surprised no one's asked this so far. I just wanted to ask you a couple of things. Firstly, when you talk about removing legal charges, is that just the large onetime items like Advair rather than the sort of bread-and-butter legal costs that are part of every drug companies' quarterly numbers? And secondly, due to the pre-exceptional and pre-legal EPS figures you've reported, e.g. the 26p and the 29p or whatever it was last year. Do they give a reasonably good approximation to the core EPS or is there any sort of major differences you'd like to point out our way?

Well, I think going forward, we will take out legal charges as all our peers do, but we will also take out a number of amortization, other write-offs, other one offs that again are consistent with what our peers do. So there is more by way of adjustment than the strip outs you've just highlighted. And as I said in the presentation, what we'll do is we'll come back before the end of the year and we'll give you all of the adjustments so that you can track 2011 into 2012, and that you've got a clean base on which to start from. So rather than try to kind of recreate it out of what we've already got, we'll give that to you going forward. But we do believe that is the cleaner measure going forward and that's why a number of our peers already use it.

Okay. Let me thank you very much for the questions. Just to summarize where we're up to, and as we're coming on track for this year, not all of our guidance has remained unchanged for the rest of this year. Share buyback continues a cliff up towards the upper end of the range we've given you. As we move into next year, we expect to see reported sales growth, we expect to see expansion of our operating margin and we also expect to be able to start to deliver greater financial efficiency between OP and EPS. What's critical, I think, is what we've started to lay out for you is the corner or the inflection point that we believe we're now hitting in this company. It isn't just about the next 6 months or the next 18 months, it's actually about what the shape of the group is going to be over the next 5 or 10 years. But what it's showing you is a group, which through its restructuring has got a portfolio of activities which exposes us to where all the growth is. 93% of all the births in the world are outside of America and Europe. So if you're in the healthcare business and the Vaccine business, you'd better be big outside of America and Europe. That's a good example. If you look at where our Consumer business is exposed, 60% of our consumer business post disposal will be in emerging markets. So you have a very different sort of shape to underpin our future growth, and as you've heard today, what we're focused on doing is not just seeing that growth over that period in sales. Also, working hard to make sure that year-on-year-on-year, we look for ways to further drive cost reduction and margin leverage,…