GlaxoSmithKline’s (GSK) consumer healthcare revenues dipped by 1% last year as the global pharma giant struggled to overcome supply chain problems in the US and Europe.

GSK’s consumer healthcare turnover was £4.33bn in 2014, down 1% compared with 2013.

Supply chain issues drove sales down 5% in Europe and 8% in the US, which was also impacted by a number of product recalls focused on the smokers health segment. Sales were also hampered by the tough comparison with a strong cold and flu season in early 2013.

Weaker market conditions saw ‘rest of the world’ growth of just 4%, but GSK did see moderate growth across most markets partly offset by a 55% reduction in China sales and a 52% decline on smokers health product sales.

Sales did pick up in the fourth quarter, rising 2% to reflect an improving supply position, particularly in the ‘rest of world’ markets.

CEO Sir Andrew Witty commented: “Our business continues to recover from recent supply issues and we expect increasing benefit from resumption in supply during 2015”.

Full year wellness sales were down 7% to £1.6bn – hit by a 29% decline in smokers health products as competition from e-cigarettes was exacerbated by product recalls and supply issues.

Oral health sales grew 4% to £1.8bn, where the continued growth of Sensodyne (up 11%) was partly offset by a 10% decline in sales of Aquafresh, which was again impacted by supply issues in both Europe and the US, together with increased competition.

Nutrition sales grew 10% to £633m, with Horlicks 11% up, reflecting continued growth in India, and Boost up 9%.

Finally, sales of products for skin health were down 11% to £310 million, primarily due to lower sales of Bactroban in China.

Overall, GSK sales fell 3% to £23bn (excluding divestments) and core operating profit was £6.59bn, 6% lower than in 2013.

The 3% fall in turnover translated to a 10% revenue decline at actual exchange rates given the strength of the pound against the majority of GSK’s trading currencies. GSK did say in the results that it was beginning to see “a more favourable currency mix”, which helped fourth quarter sales.

Witty added: “Some of the headwinds faced by the Group in 2014 will continue to adversely affect performance during 2015 with a greater impact in the first half of the year. However, with annualisation of these factors and successful execution of our priorities, we expect a stronger performance in the second half of the year.”

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