GSK delivers Q1 sales of £7.2 billion, -2% AER, +4% CER
Issued: London UK
Total EPS 11.2p, -48% AER, -33% CER; Adjusted EPS 24.6p, -2% AER, +11% CER
Significant currency impact in the quarter reflecting movements in Sterling
- CER sales growth across all 3 businesses. Pharmaceuticals sales £4.0 billion -4% AER, +2% CER; Vaccines £1.2 billion +7% AER, +13% CER; Consumer Healthcare £2.0 billion -3% AER, +2% CER
- Adjusted Group operating margin of 26.6%, down 0.2 percentage points AER, up 1.3 percentage points CER. Pharmaceuticals 33.2%; Vaccines 27.4%; Consumer Healthcare 19.4%
- Total EPS 11.2p, -48% AER, -33% CER, reflecting revaluation of Consumer Healthcare business following agreement to acquire full ownership
- Adjusted EPS 24.6p, -2% AER, +11% CER driven by continued operating and financial efficiencies
- Q1 free cash flow £324 million -50% primarily reflecting impact of £317 million Vaccine sales milestone payment to Novartis
- 19p dividend declared for quarter. Continue to expect 80p for FY 2018
- Guidance for CER growth in Adjusted EPS for 2018 maintained
- Agreement reached with Novartis to acquire full ownership of Consumer Healthcare business for $13 billion, subject to shareholder approval
Product and pipeline highlights
- Sales of Ellipta Respiratory products, £386 million +25% AER, +34% CER and Nucala £104 million +76% AER, +86% CER. Landmark IMPACT data for Trelegy Ellipta published in NEJM. sNDA approved in US and data submitted to European Medicines Agency to support expanded label. OSMO study demonstrating Nucala improves asthma control in severe eosinophilic asthma patients uncontrolled on Xolair presented at AAAAI
- Continued growth from dolutegravir-based HIV products, including new 2 drug regimen Juluca, with sales of £964 million +15% AER, +23% CER. Positive CHMP opinion received for Juluca in Europe
- Shingrix sales of £110 million; approved in Europe and Japan (23 March)
Emma Walmsley, Chief Executive Officer, GSK said:
“GSK has continued to make good progress in the first quarter with sales growth on a CER basis across all three businesses. We are strongly focused on commercial execution with encouraging starts for our most recent new product launches, Shingrix, Trelegy and Juluca. This performance combined with continued cost discipline has driven a further improvement in the Group’s Adjusted operating margin at CER. We also agreed to acquire full ownership of the Consumer Healthcare business during the quarter, delivering on one of our key capital allocation priorities. This will help improve future cash generation and support capital planning for the Group’s main priority to strengthen the Pharmaceuticals business and R&D pipeline.”
The Total results are presented under ‘Income Statement’ on page 24 and Adjusted results reconciliations are presented on pages 11, and 39 to 40. The definitions of £% or AER% growth, CER% growth, Adjusted results, free cash flow and other non-IFRS measures are set out on page 21. All expectations and targets regarding future performance should be read together with “Assumptions related to 2018 guidance and 2016-2020 outlook” and “Assumptions and cautionary statement regarding forward-looking statements” on page 22.
GSK – one of the world’s leading research-based pharmaceutical and healthcare companies – is committed to improving the quality of human life by enabling people to do more, feel better and live longer. For further information please visit www.gsk.com/en-gb/about-us.
Cautionary statement regarding forward-looking statements
This document contains statements that are, or may be deemed to be, “forward-looking statements”. Forward-looking statements give the Group’s current expectations or forecasts of future events. An investor can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as ‘anticipate’, ‘estimate’, ‘expect’, ‘intend’, ‘will’, ‘project’, ‘plan’, ‘believe’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective products or product approvals, future performance or results of current and anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, and financial results. Other than in accordance with its legal or regulatory obligations (including under the Market Abuse Regulation, the UK Listing Rules and the Disclosure and Transparency Rules of the Financial Conduct Authority), the Group undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The reader should, however, consult any additional disclosures that the Group may make in any documents which it publishes and/or files with the SEC. All readers, wherever located, should take note of these disclosures. Accordingly, no assurance can be given that any particular expectation will be met and investors are cautioned not to place undue reliance on the forward-looking statements.
Forward-looking statements are subject to assumptions, inherent risks and uncertainties, many of which relate to factors that are beyond the Group’s control or precise estimate. The Group cautions investors that a number of important factors, including those in this document, could cause actual results to differ materially from those expressed or implied in any forward-looking statement. Such factors include, but are not limited to, those discussed under Item 3.D ‘Risk Factors’ in the Group’s Annual Report on Form 20-F for 2017. Any forward looking statements made by or on behalf of the Group speak only as of the date they are made and are based upon the knowledge and information available to the Directors on the date of this report.
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