REG - GSK PLC - Final Results
31/01/2024 07:00
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RNS Number : 4323B GSK PLC 31 January 2024
GSK delivers strong 2023 performance and upgrades growth outlooks
Broad-based performance drives sales, profits and earnings growth:
• Total 2023 sales £30.3 billion +5% and +14% ex COVID
• Vaccines sales +25%, +24% ex COVID. Shingrix £3.4 billion +17%,
Arexvy £1.2 billion
• Specialty Medicines sales -8%, +15% ex COVID with HIV +13%; General Medicines
sales +5%
• Total operating profit and Total continuing EPS for 2023 reflects strong
growth, with lower charges for contingent consideration liabilities
remeasurement
• Adjusted operating profit +12% (with further positive impact of +4% ex COVID)
and Adjusted EPS +16% (with further positive impact of +6% ex COVID). This
reflected strong sales ex COVID and higher royalty income, partly offset by
increased investment in R&D and new product launches
(Financial Performance - 2023 results unless otherwise stated, growth % and
commentary at CER, ex COVID is excluding COVID-19 solutions as defined on page
53).
2023 Q4 2023
£m % AER % CER £m % AER % CER
Turnover 30,328 3 5 8,052 9 15
Turnover ex COVID 30,134 12 14 8,032 12 17
Total operating profit 6,745 5 10 573 (69) (60)
Total continuing EPS 121.6p 10 16 8.6p (77) (68)
Adjusted operating profit 8,786 8 12 1,752 10 21
Adjusted operating margin % 29.0% 1.2ppts 1.8ppts 21.8% 0.1ppts 1.2ppts
Adjusted EPS 155.1p 11 16 28.9p 12 25
Cash generated from operations 8,096 2 3,681 75
Organic R&D delivery and targeted business development supports future
growth:
• 71 Vaccines and Specialty Medicines now in clinical development, including 18
in phase III/registration
• Strong pipeline progress, with 4 major product approvals: Arexvy RSV vaccine;
Apretude for HIV prevention; Ojjaara for myelofibrosis and Jemperli in 1L
endometrial cancer
• Targeted business development further strengthens the pipeline including:
acquisition of Bellus Health and proposed acquisition of Aiolos Bio
(Respiratory), licence agreements with Janssen (Infectious Diseases) and
Hansoh Pharma (Oncology)
• Significant late-stage R&D milestones expected in 2024, including:
approval of Arexvy in 50-59 year-olds; regulatory submission for meningitis
(ABCWY) vaccine; phase III data for depemokimab (severe asthma), Nucala
(COPD), gepotidacin (UTIs/gonorrhoea), Jemperli (endometrial cancer)
2024 guidance and 2023/2024 dividends:
• Expect 2024 turnover growth of between 5 to 7%; Adjusted operating growth of
between 7 to 10%; Adjusted EPS growth of between 6 to 9%
• Increased dividend of 16p declared for Q4 2023; 58p FY 2023; 60p expected for
2024
Upgrade to longer-term outlooks:
• 2021-2026 outlook increased to sales more than +7% CAGR and Adjusted operating
profit more than +11% CAGR
• 2031 sales outlook increased to more than £38 billion; Adjusted operating
margins broadly stable through dolutegravir patent loss of exclusivity
Guidance all at CER and excluding COVID-19 solutions
Emma Walmsley, Chief Executive Officer, GSK:
"GSK delivered excellent performance in 2023, with clear highlights being the
exceptional launch of Arexvy and continued progress in our pipeline. We are
now planning for at least 12 major launches from 2025, with new Vaccines and
Specialty Medicines for infectious diseases, HIV, respiratory and oncology. As
a result of this progress and momentum, we expect to deliver another year of
meaningful sales and earnings growth in 2024, and we are upgrading our growth
outlooks for 2026 and 2031. We remain focused on delivering this potential -
and more - to prevent and change the course of disease for millions of
people."
The Total results are presented in summary above and on page 8 and Adjusted
results reconciliations are presented on pages 20, 21, 23 and 24. Adjusted
results are a non-IFRS measure excluding discontinued operations and other
adjustments that may be considered in addition to, but not as a substitute
for, or superior to, information presented in accordance with IFRS. Adjusted
results are defined on page 18 and £% or AER% growth, CER% growth, turnover
excluding COVID-19 solutions and other non-IFRS measures are defined on page
53, COVID-19 solutions are defined on page 53. GSK provides guidance on an
Adjusted results basis only, for the reasons set out on page 18. All
expectations, guidance and targets regarding future performance and dividend
payments should be read together with 'Guidance and outlooks, assumptions and
cautionary statements' on pages 54 and 55. 2021-2026 CAGR is for 5 years to
2026 with 2021 as the base year.
2024 Guidance
GSK provides its full-year guidance at constant exchange rates (CER). All
expectations and full-year growth rates exclude any contributions from
COVID-19 solutions.
Turnover is expected to increase between 5 to 7 per cent
Adjusted operating profit is expected to increase between 7 to 10 per cent
Adjusted earnings per share is expected to increase between 6 to 9 per cent
This guidance is supported by the following turnover expectations for
full-year 2024 at CER:
Vaccines - expected increase of high single-digit to low double-digit per cent in
turnover
Specialty Medicines - expected increase of low double-digit per cent in turnover
General Medicines - expected decrease of mid-single-digit per cent in turnover
Adjusted Operating profit is expected to grow between 7 to 10 per cent at CER,
despite a 6 percentage point impact to Operating Profit growth following the
loss of Gardasil royalties effective from the beginning of 2024. GSK expects
to deliver leverage at a gross margin level due to improved product mix from
Vaccines and Specialty Medicines growth and continued operational
efficiencies. In addition, GSK anticipates further leverage in Operating
Profit due to a step down in SG&A growth to a low single-digit increase.
R&D is expected to increase broadly in line with sales to support growth
of the pipeline.
Adjusted Earnings per share is now expected to increase between 6 to 9 per
cent at CER, reflecting higher operating profit and more favourable net
finance costs. Expectations for non-controlling interests remain unchanged
relative to 2023, and GSK anticipates, as previously communicated, an increase
in the adjusted effective tax rate to around 17% following implementation of a
global minimum corporate income tax rate aligned with the Organisation for
Economic Co-Operation and Development 'Pillar 2' initiative.
Additional commentary
The Dividend policy and the expected pay-out ratio remain unchanged.
Consistent with this, and reflecting strong business performance during the
year, GSK now expects to declare an increased dividend of 16p for Q4 2023 and
58p per share for the full year 2023. GSK's future dividend policy and
guidance regarding the expected dividend pay-out in 2024 are provided on page
39.
COVID-19 solutions
For the full year 2024, GSK does not anticipate any further COVID-19
pandemic-related sales or operating profit. The adverse impact of lower sales
of COVID-19 solutions in 2024 is anticipated to be one percentage point of
growth in sales and two percentage points in Adjusted operating profit.
2021-26 and 2031 Outlooks
In 2021, GSK set out outlooks and ambitions to shareholders, including for a
"step-change" in performance. These followed a significant transformation in
GSK's structure, strategy, capital allocation and culture. Since then, GSK has
made significant progress, to deliver consecutive quarters of sales and
earnings growth, and invest in new Vaccines and Specialty Medicines, to
reshape, strengthen and advance its R&D portfolio, post the demerger of
Consumer Healthcare. With this progress made, GSK has today announced upgraded
outlooks, from those previously given, for the period 2021-2026 and for 2031.
For the period 2021-2026, GSK now expects sales to grow more than 7% on a CAGR
basis and adjusted operating profit to increase more than 11%, on the same
basis. This compares to previous outlooks of more than 5% and more than 10%
respectively. Adjusted operating profit margin in 2026 is now expected to be
more than 31%.
By 2031, GSK now expects to achieve sales of more than £38 billion on a
risk-adjusted basis and at CER. This is an increase of £5 billion compared to
the estimate given in 2021 and continues to exclude any contributions from
early-stage pipeline assets, further anticipated business development and
Blenrep. GSK expects to maintain a continued strong focus on margin
improvements, while retaining flexibility to invest in future growth.
Recognising that GSK will likely face loss of exclusivity for dolutegravir
during 2028 to 2030 in US and EU, with the majority of impact 2029 to 2030,
GSK has today stated that it expects operating margins to be broadly stable
through this period. GSK expects an effective transition within its HIV
portfolio towards new long-acting treatment and prevention therapies, margin
mix benefit from growth in higher operating margin Vaccine and Specialty
Medicine products, and a continued focus on achievable productivity gains,
notably in supply chain and in SG&A.
All expectations, guidance and outlooks regarding future performance and
dividend payments should be read together with 'Guidance and outlooks,
assumptions and cautionary statements' on page 54.
If exchange rates were to hold at the closing rates on 24 January 2024
($1.27/£1, €1.17/£1 and Yen 188/£1) for the rest of 2024, the estimated
impact on 2024 Sterling turnover growth for GSK would be -3% and if exchange
gains or losses were recognised at the same level as in 2023, the estimated
impact on 2024 Sterling Adjusted Operating Profit growth for GSK would be -5%.
Results presentation
A conference call and webcast for investors and analysts of the quarterly
results will be hosted by Emma Walmsley, CEO, at 11am GMT (US EST at 6am) on
31 January 2024. Presentation materials will be published on www.gsk.com prior
to the webcast and a transcript of the webcast will be published subsequently.
Notwithstanding the inclusion of weblinks, information available on the
company's website, or from non GSK sources, is not incorporated by reference
into this Results Announcement.
Performance: turnover
Turnover 2023 Q4 2023
£m Growth Growth £m Growth Growth
AER% CER% AER% CER%
Shingles 3,446 16 17 908 18 23
Meningitis 1,260 13 14 273 20 26
RSV (Arexvy) 1,238 - - 529 - -
Influenza 504 (29) (29) 95 (66) (64)
Established Vaccines 3,266 6 7 771 4 8
Vaccines ex COVID 9,714 23 24 2,576 28 33
Pandemic vaccines 150 >100 >100 7 (88) (86)
Vaccines 9,864 24 25 2,583 25 29
HIV 6,444 12 13 1,773 6 10
Respiratory/Immunology and 3,025 16 18 863 20 25
Other
Oncology 731 21 23 244 55 62
Specialty Medicines ex COVID 10,200 14 15 2,880 13 17
Xevudy 44 (98) (98) 13 (90) (90)
Specialty Medicines 10,244 (9) (8) 2,893 8 12
Respiratory 6,825 4 6 1,746 4 9
Other General Medicines 3,395 (5) 2 830 (12) (2)
General Medicines 10,220 1 5 2,576 (2) 5
Total 30,328 3 5 8,052 9 15
Total ex COVID 30,134 12 14 8,032 12 17
By Region:
US 15,820 9 9 4,380 21 26
Europe 6,564 3 2 1,657 - -
International 7,944 (6) 1 2,015 (4) 6
Total 30,328 3 5 8,052 9 15
Turnover ex COVID is excluding COVID-19 solutions and is a non-IFRS measure
defined on page 53 with the reconciliation to the IFRS measure Turnover
included in the table above. Financial Performance - Q4 2023 results unless
otherwise stated, growth % and commentary at CER.
2023 Q4 2023
£m AER CER £m AER CER
Vaccines Total 9,864 24% 25% 2,583 25% 29%
Excluding COVID 9,714 23% 24% 2,576 28% 33%
Double-digit growth for Vaccines in the full year and quarter was driven by
the successful launch of Arexvy in the US and continued strong uptake of
Shingrix in International and Europe. Pandemic vaccines sales mostly include
GSK's share of 2023 contracted European volumes related to a COVID-19 booster
vaccine co-developed with Sanofi.
Shingles 3,446 16% 17% 908 18% 23%
Shingrix, a vaccine against herpes zoster (shingles), grew 17% full year and
23% in the quarter on increased demand and favourable pricing, with Q4 2023
representing the highest ever quarter of sales. Growth was driven by public
funding expansion and strong private uptake in International and Europe. These
regions represented 45% of global turnover, compared to a third in 2022, with
Shingrix launched in 39 markets outside of the US, most of which have
cumulative immunisation rates below 4%. International sales were driven by
launch uptake across several markets, strong momentum and channel inventory
build in China due to transition between distributors, and a new public
programme in Australia. Sales in Europe included deliveries for the UK
National Immunisation Programme which began offering Shingrix vaccination in
September. In the US, full year retail demand grew 7% while overall sales
declined 4% versus a challenging comparator period in which there was a higher
non-retail purchasing. In Q4 2023 US turnover growth of 6% benefitted from
planned wholesaler inventory reductions in Q4 2022. The US cumulative
immunisation penetration at the end of Q3 2023 reached 35% of the more than
120 million US adults(1) who are currently recommended to receive Shingrix, up
7 percentage points since the same time last year.
(1) United States Census Bureau, International Database, Year 2023.
2023 Q4 2023
£m AER CER £m AER CER
Meningitis 1,260 13% 14% 273 20% 26%
Full year double-digit Meningitis vaccine sales growth was largely delivered
by Bexsero, a vaccine against meningitis B, primarily driven by inclusion in
National Immunisation Programmes in Europe. In Q4 2023, Bexsero sales grew in
all regions reflecting increased demand and public funding expansion. Menveo,
a vaccine against meningitis ACWY, grew full year and in the quarter due to
the favourable impact of a US CDC (Center for Disease Control) stockpile
borrow in Q3 2022 and replenishment in Q4 2023. Meningitis growth benefitted
from the favourable impact of CDC stockpile movements by 6 percentage points
in the full year and 14 percentage points in Q4 2023.
RSV (Arexvy) 1,238 - - 529 - -
Arexvy, the world's first approved respiratory syncytial virus (RSV) vaccine
for older adults, achieved more than £1.2 billion in sales driven by strong
uptake and leading market share, delivering an outstanding launch. Almost all
sales were in the US where Arexvy is available in all major retail pharmacies
with competitive contracting in place. Retailers administered more than 90% of
doses, and Arexvy achieved more than two-thirds of the share of retail
vaccinations in both the full year and quarter. Approximately 6 million of the
83 million US adults(1) aged 60 and older at risk have been vaccinated with
Arexvy.
Influenza 504 (29%) (29%) 95 (66%) (64%)
Fluarix/FluLaval sales declined in 2023 in line with expectations driven by
competitive pressure and lower market demand primarily in the US, where the Q4
2023 sales decrease was also negatively impacted by quarterly supply phasing
and RAR adjustments.
Established Vaccines 3,266 6% 7% 771 4% 8%
Full year Established Vaccines growth was driven by Rotarix favourable US CDC
stockpile movements, MMR/V vaccines increased supply in International, and
Hepatitis vaccine performance related to the travel market recovery. In the
quarter, growth was driven by US CDC stockpile replenishment of
Infanrix/Pediarix in the US and also MMR/V vaccines increased supply in
International. Established Vaccines growth excluding the impact of CDC
stockpile movements was 4% in the full year and 6% in Q4 2023.
Specialty Medicines Total 10,244 (9%) (8%) 2,893 8% 12%
Excluding COVID 10,200 14% 15% 2,880 13% 17%
Specialty Medicines growth (excluding COVID-19 solutions) of 15% full year and
17% in Q4 2023 reflected continued growth momentum on the HIV portfolio, and
growth acceleration in both Oncology and Respiratory/Immunology and Other.
COVID-19 solutions negatively impacted growth full year by 23 percentage
points and in the quarter by 5 percentage points.
HIV 6,444 12% 13% 1,773 6% 10%
The growth of HIV in Q4 2023 and full year was primarily driven by a 2
percentage point increase in market share within a broadly flat global
treatment market, attributable to patient demand for the Oral 2DR (Dovato,
Juluca) and Long-Acting medicines (Cabenuva, Apretude). Q4 2023 performance
benefitted from continued patient demand, driven by the Oral 2DR and
Long-Acting medicines which contributed approximately ten percentage points of
growth. Full year growth was driven by patient demand of ten percentage
points, with the remainder from favourable pricing dynamics and tender growth.
Dovato continues to be the highest selling product in the HIV portfolio with
sales of £516 million in the quarter.
Oral 2DR and Long Acting 3,337 40% 40% 968 24% 28%
Oral 2DR (Dovato, Juluca) and Long-Acting medicine (Cabenuva, Apretude) sales
growth continues and now represents 55% of the total HIV portfolio compared to
46% for Q4 2022, driven by market share growth of 4 percentage points versus
Q4 2022. Long-Acting medicine sales in the quarter were £275 million, growing
£133 million versus Q4 2022 and representing 16% of total HIV portfolio.
Cabenuva sales in Q4 2023 were £223 million, reflecting strong patient
demand, high levels of market access, and reimbursement in the US and EU.
Respiratory/Immunology and Other 3,025 16% 18% 863 20% 25%
This therapy area includes sales of Nucala and Benlysta, and Jesduvroq in the
US and Duvroq in Japan for patients with anaemia due to chronic kidney
disease. There was consistent and sustained double-digit growth in the full
year in both Benlysta and Nucala, with growth acceleration in Q4 2023.
(1) United States Census Bureau, International Database, Year 2023.
2023 Q4 2023
£m AER CER £m AER CER
Nucala 1,655 16% 18% 471 19% 25%
Nucala, is an IL-5 antagonist monoclonal antibody treatment for severe asthma,
with additional indications including chronic rhinosinusitis with nasal
polyps, eosinophilic granulomatosis with polyangiitis (EGPA) and
hypereosinophilic syndrome (HES). Continued strong growth in all regions in
the full year and in the quarter reflected high patient demand in severe
eosinophilic asthma, and additionally from increasing sales and growth
contributions from the new indications. Growth in Q4 2023 accelerated due to
stronger US performance resulting from increasing new patient starts coupled
with channel inventory build.
Benlysta 1,349 18% 19% 389 19% 25%
Benlysta, a monoclonal antibody treatment for Lupus, continues to show
consistent growth representing strong demand in US and Europe, with bio
penetration and volume uptake in certain International markets, particularly
in Japan and China. Q4 2023 growth acceleration to 25% driven by US
performance coupled with the impacts of channel inventory build, uplifted the
full year growth to 19%.
Oncology 731 21% 23% 244 55% 62%
Oncology demonstrated strong growth in the full year and in Q4 2023 driven by
Jemperli and Zejula performance, and uptake of Ojjaara post US launch in Q3
2023, partially offset by the impact of Blenrep withdrawal from the US market
in November 2022. Growth of Jemperli continued to accelerate in Q4 2023,
particularly in the US post approval in Q3 2023 for frontline treatment in
combination with chemotherapy for patients with dMMR/MSI-H primary advanced or
recurrent endometrial cancer.
Zejula 523 13% 15% 152 22% 28%
Zejula, a PARP inhibitor treatment for ovarian cancer, grew 15% in the full
year with strong growth from all regions, with US growth in the first line
indication more than offsetting the reduction in use in second line following
the update to US prescribing information agreed with the FDA in Q4 2022.
Zejula demonstrated strong growth of 28% in Q4 2023, driven by continued US
performance and growth following the launch of the tablet formulation,
positively impacted by RAR movements, as well as continued positive momentum
in Europe and International.
General Medicines 10,220 1% 5% 2,576 (2%) 5%
Growth in the full year was driven by both Respiratory and Other General
Medicines, with ongoing strong demand for Trelegy in all regions, Anoro in
Europe and International, and a continued post pandemic recovery of the
antibiotic market in Europe and International regions.
Respiratory 6,825 4% 6% 1,746 4% 9%
Performance in the full year and in Q4 2023 reflected growth of Trelegy and
the single inhaled triple therapy class across all regions, and of Anoro in
Europe and International.
Trelegy 2,202 27% 29% 589 29% 35%
Trelegy, is the most prescribed single inhaler triple therapy (SITT) treatment
worldwide for COPD and asthma. Strong growth in the full year and in Q4 2023
was delivered across all regions, reflecting increased patient demand, growth
of the SITT market and penetration of the class. Growth momentum continues,
supported by the outputs of recently updated primary care guidelines from the
Global Initiative for Chronic Obstructive Lung Disease. Growth in Q4 2023 was
positively impacted by favourable RAR adjustments, accounting for 5 percentage
points of growth.
Seretide/Advair 1,139 (2%) 1% 276 (16%) (12%)
Seretide/Advair is an ICS/LABA treatment for asthma and COPD. In the full year
2023, Seretide/Advair sales growth increased 1% primarily reflecting
favourable US pricing. However this was offset by generic erosion impacts in
Europe and certain International markets. In Q4 2023, sales decreased 12% and
reflected continued generic erosion from competitor products in Europe and
International. In the US, growth was impacted by unfavourable RAR
adjustments and the impact of US of channel inventory reduction ahead of 2024
price changes.
Other General Medicines 3,395 (5%) 2% 830 (12%) (2%)
Low single digit growth of 2% full year reflected ongoing post pandemic demand
for anti-infectives in Europe and International, and certain third party
manufacturing arrangements. The decline of 2% in Q4 2023 is adversely impacted
by unfavourable RAR adjustments, accounting for 2 percentage points of
decline. Overall growth in this product group continues to be impacted by
ongoing generic competition.
By Region
2023 Q4 2023
£m AER CER £m AER CER
US Total 15,820 9% 9% 4,380 21% 26%
Excluding COVID 15,810 15% 16% 4,369 21% 26%
In the full year 2023, sales growth was adversely impacted by 7 percentage
points due to decreased sales of Xevudy, however the decrease in sales had no
impact in Q4 2023, as Xevudy sales in 2022 were predominantly realised in the
first quarter.
Vaccines grew strongly in the full year and in Q4 2023 driven by Arexvy launch
uptake and leading market share, partly offset by competition and lower market
demand for Influenza vaccines. Growth benefitted from favourable US CDC
stockpile movements by 4 percentage points in the full year and in the
quarter.
Specialty Medicines grew in the full year and in Q4 2023 driven by a strong
HIV performance, Benlysta and Nucala continued growth, and strong Oncology
growth despite partial offset from the impact of the withdrawal of Blenrep in
November 2022.
General Medicines growth in Q4 2023 was largely driven by Trelegy from
increased patient demand and growth of the SITT market, partially offset by
Established Respiratory and Other General Medicines.
Europe Total 6,564 3% 2% 1,657 - -
Excluding COVID 6,431 10% 8% 1,648 4% 4%
COVID-19 solutions impacted growth in the full year by 6 percentage points and
in the quarter by 4 percentage points. Excluding the impact of COVID-19
solutions, Europe delivered strong growth of 8% in the full year and continued
to grow in Q4 2023 by 4%.
Vaccines growth reflected Shingrix national immunisation programme initiation
in the UK and launch uptake across several markets, together with Bexsero
national immunisation campaigns in France and Spain, and ongoing travel
vaccine recovery.
Specialty Medicines double digit growth in the full year and in the quarter
was driven by growth in HIV, Oncology, Benlysta and Nucala including the
impact of new indication launches.
General Medicines low single digit growth was maintained in the full year,
with a low single digit percentage decline in the quarter driven by
Established Respiratory performance.
International Total 7,944 (6%) 1% 2,015 (4%) 6%
Excluding COVID 7,893 7% 15% 2,015 1% 12%
COVID-19 solutions impacted growth in the full year by 14 percentage points
and in the quarter by 6 percentage points. Excluding the impact of COVID-19
solutions, International continued to grow in Q4 2023 by 12% and in the full
year by 15%, with strong growth across all product groups.
The growth in the quarter at AER of 1% compared to growth at CER of 12% was
driven by year on year exchange movements Q4 2023 vs Q4 2022 in a number of
emerging market countries.
Vaccines double digit growth was driven by Shingrix launch uptake across
several markets, strong momentum and channel inventory build in China, and a
new public programme in Australia. Established and Meningitis vaccines also
contributed to the growth.
Specialty Medicines grew in HIV, Nucala, Benlysta and Zejula.
General Medicines growth was driven by Trelegy and growth across Established
Respiratory. Other General Medicines growth was driven by Augmentin on strong
post pandemic antibiotic demand.
Financial performance
Total Results 2023 Q4 2023
£m % AER % CER £m % AER % CER
Turnover 30,328 3 5 8,052 9 15
Cost of sales (8,565) (10) (10) (2,418) 8 10
Selling, general and administration (9,385) 12 14 (2,678) 10 16
Research and development (6,223) 13 14 (2,047) 14 16
Royalty income 953 26 26 235 14 14
Other operating income/(expense) (363) (571)
Operating profit 6,745 5 10 573 (69) (60)
Net finance expense (677) (16) (15) (193) (21) (18)
Share of after tax profit/(loss) of associates (5) (1)
and joint ventures
Profit/(loss) on disposal of interest in 1 -
associates
Profit before taxation 6,064 8 14 379 (77) (67)
Taxation (756) 19
Tax rate % 12.5% (5.0%)
Profit after taxation 5,308 8 14 398 (76) (67)
Profit attributable to non-controlling 380 48
interests
Profit attributable to shareholders 4,928 350
5,308 8 14 398 (76) (67)
Earnings per share 121.6p 10 16 8.6p (77) (68)
Financial Performance - Q4 2023 results unless otherwise stated, growth % and
commentary at CER.
Adjusted results
Reconciliations between Total results and Adjusted results for Q4 2023, Q4
2022, Full Year 2023 and Full Year 2022 are set out on pages 20, 21, 23 and
24.
2023 Q4 2023
£m % AER % CER £m % AER % CER
Turnover 30,328 3 5 8,052 9 15
Cost of sales (7,716) (12) (11) (2,163) 7 8
Selling, general and administration (9,029) 11 13 (2,588) 6 12
Research and development (5,750) 14 14 (1,784) 17 20
Royalty income 953 26 26 235 14 14
Adjusted operating profit 8,786 8 12 1,752 10 21
Adjusted profit before taxation 8,112 10 15 1,560 15 27
Taxation (1,257) 10 15 (235) 37 52
Adjusted profit after taxation 6,855 10 15 1,325 11 23
Adjusted profit attributable to non-controlling interests 572 152
Adjusted profit attributable to shareholders 6,283 1,173
6,855 10 15 1,325 11 23
Earnings per share 155.1p 11 16 28.9p 12 25
2023 Q4 2023
£m AER CER £m AER CER
Cost of sales Total 8,565 (10%) (10%) 2,418 8% 10%
% of sales 28.2% (4.3%) (4.6%) 30.0% (0.3%) (1.2%)
Adjusted 7,716 (12%) (11%) 2,163 7% 8%
% of sales 25.4% (4.4%) (4.6%) 26.9% (0.7%) (1.5%)
Total and Adjusted cost of sales as a percentage of sales decreased in the
full year and Q4 2023 primarily reflecting lower sales of lower margin Xevudy
compared to 2022. Excluding Xevudy, the full year and the quarter benefitted
from an increasing margin contribution from Vaccines sales, particularly the
launch of Arexvy in Q3 2023 in the US and Shingrix outside the US. In
addition, Specialty Medicines, particularly HIV, contributed to the improved
margin, as well as continued operational efficiencies. This was partly offset
by adverse inventory provision adjustments in the year as well as inflationary
impact on input costs.
2023 Q4 2023
£m AER CER £m AER CER
Selling, general & administration Total 9,385 12% 14% 2,678 10% 16%
% of sales 30.9% 2.4% 2.3% 33.3% 0.2% 0.4%
Adjusted 9,029 11% 13% 2,588 6% 12%
% of sales 29.8% 2.1% 1.9% 32.1% (0.9%) (0.7%)
Growth in Total and Adjusted SG&A in 2023 primarily reflected increased
investment for growth in Vaccines, including disease awareness, launch and
global market expansion for Arexvy, and investment behind global market
expansion and disease awareness for Shingrix. In Specialty Medicines,
increased investment was targeted behind long-acting injectables in HIV and
the launch of Ojjaara for myelofibrosis in Oncology. This was partly offset by
the continuing benefit of restructuring and tight control of ongoing costs.
2023 also reflected the Zejula royalty dispute in Q1 2023. Total SG&A also
included an increase in significant legal costs (see details on page 22).
2023 Q4 2023
£m AER CER £m AER CER
Research & Total 6,223 13% 14% 2,047 14% 16%
development
% of sales 20.5% 1.8% 1.5% 25.4% 1.1% 0.3%
Adjusted 5,750 14% 14% 1,784 17% 20%
% of sales 19.0% 1.7% 1.4% 22.2% 1.5% 0.9%
R&D operating expense growth in 2023 was driven by investment across the
portfolio.
In the late stage, increased investment in Vaccines was driven by continued
acceleration and progression of the pipeline including RSV, pneumococcal, mRNA
and therapeutic HSV vaccines.
Respiratory/Immunology investment continued in depemokimab in the Phase III
programmes in asthma and nasal polyps together with camlipixant a new asset
for refractory chronic cough, Nucala in COPD, paediatric Benlysta and CCL 17
in osteo arthritic pain. This was offset by decreased expense in the
completion of the clinical programme for otilimab.
Infectious Diseases investment in bepirovirsen for treatment of chronic
hepatitis B increased to support both monotherapy and combination programmes.
Investment in key assets in oncology continued such as Jemperli and Ojjaara
but were offset by reduction in the terminated Cell and Gene Therapy
programme.
In the early-stage, investment increased in IL18 for atopic dermatitis and in
the HIV portfolio, focused on next generation long-acting treatments and
preventative medicines.
In addition to the key drivers for the full year, Q4 2023 also reflected
investments for continued acceleration of the portfolio and the newly acquired
camlipixant asset, together with the cost of reorganisation of the Research
unit.
Total R&D included higher impairment charges compared with 2022 and Q4
2022.
2023 Q4 2023
£m AER CER £m AER CER
Royalty income Total 953 26% 26% 235 14% 14%
Adjusted 953 26% 26% 235 14% 14%
Growth in Total and Adjusted royalty income in the full year and Q4 2023
primarily related to Gardasil royalties, which were £472 million in 2023 and
£80 million in the quarter, as well as Kesimpta and Biktarvy royalties. The
overwhelming majority of the income from Gardasil royalties ceased at the end
of 2023.
2023 Q4 2023
£m AER CER £m AER CER
Other operating Total (363) (54%) (54%) (571) >(100%) >(100%)
income/(expense)
The full year other operating expense reflected a charge of £546 million
(2022: £1,726 million) arising from the remeasurement of contingent
consideration liabilities and the liabilities for the Pfizer put option, and a
fair value loss of £17 million (2022: £229 million gain) on the retained
stake in Haleon plc (Haleon), partly offset by £200 million (2022: £306
million) of other net income primarily related to equity investments and
milestone income (including £49 million dividends received from the retained
investment in Haleon). In Q1 2022 upfront income of £0.9 billion was received
from the settlement with Gilead Sciences, Inc. (Gilead).
In Q4 2023 other operating expense reflected a charge of £430 million (Q4
2022: £3 million gain) arising from the remeasurement of contingent
consideration liabilities and the liabilities for the Pfizer, Inc. (Pfizer)
put option, and a fair value loss of £172 million (Q4 2022: £606 million
gain) on the retained stake in Haleon, partly offset by net income of £31
million (Q4 2022: £135 million) primarily received from equity investments
and milestone income.
2023 Q4 2023
£m AER CER £m AER CER
Operating profit Total 6,745 5% 10% 573 (69%) (60%)
% of sales 22.2% 0.3% 1.0% 7.1% (18.2%) (16.6%)
Adjusted 8,786 8% 12% 1,752 10% 21%
% of sales 29.0% 1.2% 1.8% 21.8% 0.1% 1.2%
Total operating profit margin was higher in 2023 due to profitable growth
across the portfolio as well as favourable movements in contingent
consideration liabilities, partly offset by an unfavourable comparison due to
the £0.9 billion upfront income received from the settlement with Gilead in
Q1 2022. The quarter is impacted by unfavourable movements in contingent
consideration liabilities and fair value losses on the retained stake in
Haleon (Q4 2022 fair value gains).
2023 and Q4 2023 Adjusted operating profit benefitted from strong sales,
favourable product mix and increased royalty income partly offset by increased
investment behind product launches and in R&D. The full year also included
increased legal charges primarily relating to the Zejula royalty dispute.
In 2023 the adverse impact of lower sales of COVID-19 solutions was 4
percentage points of Adjusted operating profit growth, with a reduction in
Adjusted operating profit margin of 0.4 percentage points. In the quarter the
adverse impact of lower sales of COVID-19 solutions was 5 percentage points of
operating profit growth, with minimal impact on Adjusted operating profit
margin.
2023 Q4 2023
£m AER CER £m AER CER
Adjusted operating Commercial Operations 14,656 8% 10% 3,612 12% 20%
profit by segment
% of sales 48.3% 2.0% 2.1% 44.9% 1.2% 2.1%
R&D (5,607) 11% 11% (1,731) 14% 17%
Commercial Operations Adjusted operating profit in full year and quarter
benefitted from strong sales and favourable product mix (with minimal Xevudy
sales) and increased royalty income, partly offset by increased investment in
growth and launch assets as well as an increase in legal provisions in 2023.
The R&D segment operating expenses growth in the full year was driven by
progression of the late stage in Vaccines, Respiratory/Immunology and
Infectious Diseases. This included pneumococcal and mRNA programmes together
with the newly acquired camlipixant and ongoing investment in key programmes
such as depemokimab and bepirovirsen. Q4 2023 also reflected investments for
continued acceleration of the portfolio, together with the cost of
reorganisation of the Research unit.
2023 Q4 2023
£m AER CER £m AER CER
Net finance costs Total 677 (16%) (15%) 193 (21%) (18%)
Adjusted 669 (15%) (15%) 191 (19%) (16%)
The decrease in net finance costs in the full year and Q4 2023 was mainly
driven by the net savings from maturing bonds including the Sterling Notes
repurchase in Q4 2022 and higher interest income on cash, partly offset by
higher interest on short-term financing.
2023 Q4 2023
£m AER CER £m AER CER
Taxation Total 756 7% 14% (19) >(100%) (7%)
Tax rate % 12.5% (5.0%)
Adjusted 1,257 10% 15% 235 37% 52%
Tax rate % 15.5% 15.1%
The full year charge of £756 million represented an effective tax rate on
Total results of 12.5% and reflected the different tax effects of the various
Adjusting items.
2023 Q4 2023
£m AER CER £m AER CER
Non-controlling Total 380 (17%) (17%) 48 (62%) (55%)
interests ("NCIs")
Adjusted 572 (4%) (4%) 152 2% 9%
The decrease in Total profit from continuing operations allocated to NCIs in
the full year was primarily driven by lower ViiV Healthcare profits with an
allocation of £374 million (2022: £416 million), as well as lower net
profits in some of the Group's other entities. Q4 2023 was impacted primarily
by lower ViiV Healthcare profits with an allocation of £50 million (Q4 2022:
£124 million).
In the full year, the decrease in Adjusted profit from continuing operations
allocated to NCIs reflected lower net profits in some of the Group's other
entities with NCIs, partly offset by higher profits in ViiV Healthcare with an
allocation of £566 million (2022: £551 million). The increase in Q4 2023
primarily reflected higher profit allocations from ViiV Healthcare of £154
million (Q4 2022: £148 million), partly offset by lower net profits in some
of the Group's other entities with NCIs.
2023 Q4 2023
£p AER CER £p AER CER
Earnings per share Total continuing 121.6p 10% 16% 8.6p (77%) (68%)
Adjusted 155.1p 11% 16% 28.9p 12% 25%
Adjusted EPS in the full year and quarter reflected the growth in Adjusted
Operating profit as well as lower finance costs. 2023 growth also reflected a
favourable benefit from lower non-controlling interests.
In 2023 and Q4 2023, lower sales from lower margin COVID-19 solutions reduced
Adjusted EPS by six and seven percentage points respectively.
In 2023, the increase in Total continuing EPS primarily reflected lower
charges related to the remeasurement of contingent consideration liabilities,
partly offset by a fair value loss on the retained stake in Haleon compared to
a fair value gain in the same period last year. In addition, there is an
unfavourable comparison due to upfront income received from the settlement
with Gilead in Q1 2022. In Q4 2023, the decrease in Total continuing EPS is
driven by higher charges related to the remeasurement of contingent
consideration liabilities and a fair value loss on the retained stake in
Haleon (Q4 2022 gain).
Currency impact on results
The results for the 2023 are based on average exchange rates, principally
£1/$1.24, £1/€1.15 and £1/Yen 175. The results for Q4 2023 are based on
average exchange rates, principally £1/$1.25, £1/€1.15 and £1/Yen 183.
The period-end exchange rates were £1/$1.27, £1/€1.15 and £1/Yen 180.
Comparative exchange rates are given on page 41.
Year to Date Q4 2023
£m/£p AER CER £m/£p AER CER
Turnover 30,328 3% 5% 8,052 9% 15%
Earnings per share Total 121.6p 10% 16% 8.6p (77%) (68%)
Adjusted 155.1p 11% 16% 28.9p 12% 25%
In 2023 the adverse currency impact primarily reflected weakening of emerging
market currencies and the Yen against Sterling and strengthening of Sterling
against the US Dollar, partly offset by weakening of Sterling against the
Euro. Exchange gains or losses on the settlement of intercompany transactions
had a minimal impact on Adjusted EPS.
In Q4 2023, the adverse currency impact primarily reflected the strengthening
of Sterling against the US Dollar as well as the weakening of emerging market
currencies against Sterling. Exchange gains or losses on the settlement of
intercompany transactions had a one percentage point favourable impact on
Adjusted EPS.
Cash generation
Cash flow
2023 2022 Q4 2023 Q4 2022
£m £m £m £m
Cash generated from operations attributable to continuing 8,096 7,944 3,681 2,101
operations (£m)
Cash generated from operations attributable to discontinued - 932 - 4
operations (£m)
Total cash generated from operations (£m) 8,096 8,876 3,681 2,105
Total net cash generated from operating activities (£m) 6,768 7,403 3,196 1,905
Free cash inflow/(outflow) from continuing operations* (£m) 3,409 3,348 2,095 895
Free cash flow from continuing operations growth (%) 2% 1% >100% (62%)
Free cash flow conversion from continuing operations* (%) 69% 75% >100% 60%
Total net debt** (£m) 15,040 17,197 15,040 17,197
* Free cash flow from continuing operations and free cash flow conversion are
defined on page 53. Free cash flow from continuing operations is analysed on
page 44.
** Net debt is analysed on page 44.
2023
Cash generated from operating activities from continuing operations was
£8,096 million (2022: £7,944 million). The increase primarily reflected
higher adjusted operating profit, a favourable comparison on the timing of net
Xevudy related receipts and payments, and lower pension contributions, partly
offset by an unfavourable comparison due to the upfront income from the
settlement with Gilead received in Q1 2022, increase in trade receivables due
to higher sales including the launch of Arexvy, lower payable balances
reflecting increased investment in 2022 and higher inventory.
Total contingent consideration cash payments in 2023 were £1,145 million
(2022: £1,137 million), including cash payments made to Shionogi & Co.
Ltd (Shionogi) of £1,106 million (2022: £1,100 million). £1,134 million
(2022: £1,058 million) of these were recognised in cash flows from operating
activities.
Free cash inflow was £3,409 million for 2023 (2022: £3,348 million inflow).
In addition to the increase in cash generated from operating activities from
continuing operations, the increase in free cash inflow in the full year was
driven by lower net interest paid and lower dividends paid to non-controlling
interests, partly offset by lower proceeds from the sale of intangible assets.
Q4 2023
Cash generated from operating activities from continuing operations for the
quarter was £3,681 million (Q4 2022: £2,101 million). The increase
primarily reflected higher receivables' collections, driven by the launch of
Arexvy in Q3 2023, partly offset by timing of returns and rebates.
Total contingent consideration cash payments in the quarter were £285 million
(Q4 2022: £273 million), including cash payments made to Shionogi of
£272 million (Q4 2022: £257 million). £281 million (Q4 2022: £269
million) of these were recognised in cash flows from operating activities.
Free cash inflow was £2,095 million for the quarter (Q4 2022: £895 million
inflow). In addition to the increase in cash generated from operating
activities from continuing operations, the increase in free cash inflow in the
quarter was driven by lower net interest paid and lower dividends paid to
non-controlling interests, partly offset by higher tax payments and lower
proceeds from the sale of intangible assets.
Total Net debt
At 31 December 2023, net debt was £15,040 million, compared with £17,197
million at 31 December 2022, comprising gross debt of £18,018 million and
cash and liquid investments of £2,978 million. See net debt information on
page 43.
Net debt decreased by £2.2 billion primarily due to £3.4 billion free cash
inflow, £1.9 billion proceeds from the disposal of investments, including the
partial sale of the retained stake in Haleon, and net favourable exchange
impacts of £0.6 billion from the translation of non-Sterling denominated
debt. These were partly offset by dividends paid to shareholders of £2.2
billion and the net acquisition cost of BELLUS Health Inc. (Bellus) for £1.5
billion.
At 31 December 2023, GSK had short-term borrowings (including overdrafts and
lease liabilities) repayable within 12 months of £2,813 million with loans of
£1,433 million repayable in the subsequent year.
On 17 January 2024, GSK completed the sale of 300 million shares in Haleon
raising gross proceeds of £978 million. See post balance sheet event note on
page 44.
Contents Page
Q4 2023 pipeline highlights 14
ESG 16
Total and Adjusted results 18
Income statement 26
Statement of comprehensive income 27
Balance sheet 28
Statement of changes in equity 29
Cash flow statement 30
Sales tables 32
Segment information 36
Legal matters 38
Returns to shareholders 39
Additional information 40
Net debt information 43
Post balance sheet event note 44
Related party transactions 44
R&D commentary 45
Reporting definitions 53
Guidance, assumptions and cautionary statements 54
Contacts
GSK plc (LSE/NYSE:GSK) is a global biopharma company with a purpose to unite
science, technology, and talent to get ahead of disease together. Find out
more at www.gsk.com (http://www.gsk.com/) .
GSK enquiries:
Media Tim Foley +44 (0) 20 8047 5502 (London)
Kathleen Quinn +1 202 603 5003 (Washington)
Investor Relations Nick Stone +44 (0) 7717 618834 (London)
James Dodwell +44 (0) 7881 269066 (London)
Mick Readey +44 (0) 7990 339653 (London)
Joshua Williams +44 (0) 7385 415719 (London)
Jeff McLaughlin +1 215 589 3774 (Philadelphia)
Frances De Franco +1 215 751 4855 (Philadelphia)
Registered in England & Wales:
No. 3888792
Registered Office:
980 Great West Road
Brentford, Middlesex
TW8 9GS
Q4 2023 pipeline highlights (since 1 November 2023)
Medicine/vaccine Trial (indication, presentation) Event
Regulatory approvals or other regulatory action Jemperli RUBY (1L mismatch repair deficient/microsatellite instability-high Regulatory approval (EU)
(dMMR/MSI-H) endometrial cancer)
Omjjara (momelotinib) MOMENTUM (myelofibrosis with anaemia) Regulatory approval (EU)
Nucala Severe eosinophilic asthma Regulatory approval (CN)
Regulatory submissions or acceptances Arexvy RSV, adults aged 50-59 years Regulatory acceptance (EU)
Arexvy RSV, adults aged 50-59 years Regulatory acceptance (JP)
Phase III data readouts or other significant events Blenrep DREAMM-7 (2L + multiple myeloma) Positive phase III data readout
Jemperli/Zejula RUBY part 2 (1L endometrial cancer) Positive phase III data readout
Anticipated news flow
Timing Medicine/vaccine Trial (indication, presentation) Event
H1 2024 Arexvy RSV, older adults aged 50-59 years Regulatory submission (US)
gepotidacin EAGLE-1 (urogenital gonorrhoea) Phase III data readout
MenABCWY (gen 1) Meningococcal ABCWY Regulatory submission (US)
vaccine candidate
depemokimab SWIFT-1/2 (severe asthma) Phase III data readout
Nucala Chronic rhinosinusitis with nasal polyps Regulatory submission (CN)
Jemperli RUBY part 1 (OS overall population, 1L endometrial cancer) Regulatory submission (US)
momelotinib MOMENTUM (myelofibrosis with anaemia) Regulatory decision (JP)
Zejula FIRST (1L maintenance ovarian cancer) Phase III data readout
H2 2024 Arexvy RSV, older adults aged Regulatory decision
50-59 years (US, EU, JP)
gepotidacin EAGLE-2/3 (uncomplicated urinary tract infection) Regulatory submission (US)
MenABCWY (gen 1) Meningococcal ABCWY Regulatory submission (EU)
vaccine candidate
depemokimab ANCHOR-1/2 (chronic rhinosinusitis with nasal polyps) Phase III data readout
depemokimab ANCHOR-1/2 (chronic rhinosinusitis with nasal polyps) Regulatory submission (US)
depemokimab SWIFT-1/2 (severe asthma) Regulatory submission (US)
Nucala Chronic rhinosinusitis with nasal polyps Regulatory decision (JP)
Nucala MATINEE (chronic obstructive pulmonary disease) Phase III data readout
Nucala MATINEE (chronic obstructive pulmonary disease) Regulatory submission (US)
Blenrep DREAMM-8 (2L + multiple myeloma) Phase III data readout
cobolimab COSTAR (non-small cell lung cancer) Phase III data readout
Zejula ZEAL (1L maintenance non-small cell lung cancer) Phase III data readout
linerixibat GLISTEN (cholestatic pruritus in primary biliary cholangitis) Phase III data readout
Anticipated news flow continued
Timing Medicine/vaccine Trial (indication, presentation) Event
2025 gepotidacin EAGLE-2/3 (uncomplicated urinary tract infection) Regulatory decision (US)
gepotidacin EAGLE-1 (urogenital gonorrhoea) Regulatory submission (US)
gepotidacin EAGLE-1 (urogenital gonorrhoea) Regulatory decision (US)
MenABCWY (gen 1) vaccine candidate Meningitis ABCWY Regulatory decision (US, EU)
tebipenem pivoxil PIVOT-PO (complicated urinary tract infection) Phase III data readout
tebipenem pivoxil PIVOT-PO (complicated urinary tract infection) Regulatory submission (US)
camlipixant CALM-1/2 (refractory chronic cough) Phase III data readout
camlipixant CALM-1/2 (refractory chronic cough) Regulatory submission
(US, EU)
depemokimab SWIFT-1/2 (severe asthma) Regulatory decision (US)
depemokimab ANCHOR-1/2 (chronic rhinosinusitis with nasal polyps) Regulatory decision (US)
depemokimab OCEAN (eosinophilic granulomatosis with polyangiitis) Phase III data readout
Nucala Chronic rhinosinusitis with nasal polyps Regulatory decision (CN)
Nucala MATINEE (chronic obstructive pulmonary disease) Regulatory decision (US)
Nucala MATINEE (chronic obstructive pulmonary disease) Regulatory submission
(CN, EU)
Blenrep DREAMM-7/8 (2L+ multiple myeloma) Regulatory submission
(US, EU, CN, JP)
Blenrep DREAMM-7/8 (2L+ multiple myeloma) Regulatory decision
(US, EU, CN, JP)
cobolimab COSTAR, (2L non-small cell lung cancer) Regulatory submission
(US, EU)
Jemperli RUBY part 1 (1L endometrial cancer) Regulatory decision (US)
linerixibat GLISTEN (cholestatic pruritus in primary biliary cholangitis) Regulatory submission
(US, EU, CN, JP)
linerixibat GLISTEN (cholestatic pruritus in primary biliary cholangitis) Regulatory decision (US)
Refer to pages 45 to 52 for further details on several key medicines and
vaccines in development by therapy area.
Trust: progress on our six priority areas for responsible business
Building Trust by operating responsibly is integral to GSK's strategy and
culture. This will support growth and returns to shareholders, reduce risk,
and help GSK's people thrive while delivering sustainable health impact at
scale. The company has identified six Environmental, Social, and Governance
(ESG) focus areas that address what is most material to GSK's business and the
issues that matter the most to its stakeholders. Highlights below include
activity since Q3 2023 results. For more details on annual updates, please see
GSK'S ESG Performance Report 2022 here: https://gsk.to/2022ESGPerf
(https://gsk.to/2022ESGPerf) . GSK's 2023 ESG Performance Report will be
published in Q1 2024.
Access
Commitment: to make GSK's vaccines and medicines available at value-based
prices that are sustainable for the business and implement access strategies
that increase the use of GSK's vaccines and medicines to treat and protect
underserved people.
Progress since Q3 2023:
• In November, GSK shipped the first doses of the malaria vaccine, Mosquirix
(RTS,S) to Cameroon, as part of the Unicef tender to supply 18 million doses
over 3 years, potentially saving thousands of lives every year. Cameroon is
the first country outside of those involved in the Malaria Vaccine
Implementation Programme to receive doses, marking an important moment as we
commence the broader roll-out of this vaccine. A further 1.7 million doses of
the vaccine are expected to arrive in Burkina Faso, Liberia, Niger and Sierra
Leone in early 2024.
• In December, GSK, in collaboration with the Global Coalition on Aging,
announced a new report from the IQVIA Institute for Human Data Science. The
report, funded by GSK, explores the role of social and structural determinants
of health in adult vaccine access and uptake across five global cities with
strong data about their ageing populations. The data demonstrated vaccine use
varies substantially even within a single city and suggest that policies, such
as improved access to pharmacies or other points of vaccination, should be
implemented to drive equitable access to adult immunisation. More information
can be found here: https://gsk.to/3HeGFpZ (https://gsk.to/3HeGFpZ)
• In December, GSK announced recipients of the inaugural grant programme of the
COiMMUNITY Initiative, a multipronged effort to support the design of a more
systematic, collaborative and equitable approach to helping increase adult
immunisation rates in the US. Each grant-funded project is receiving between
$50,000 and $175,000 out of a total $1 million in funding to help address
long-standing barriers to adult immunisation in the US. More information can
be found here: https://gsk.to/47CdBDo (https://gsk.to/47CdBDo)
• Performance metrics related to access are updated annually with related
details in GSK's ESG Performance Report 2022 on page 9.
Global health and health security
Commitment: develop novel products and technologies to treat and prevent
priority diseases, including pandemic threats.
Progress since Q3 2023:
• Infectious diseases (IDs) such as malaria, tuberculosis and enteric diseases
are among the leading causes of death globally, killing almost 9 million
people each year. These diseases, which are often preventable and treatable,
disproportionately affect sub-Sahara African populations. Research is critical
for the development and implementation of effective measures to meet the
global health challenges of eliminating IDs. GSK opened its call for research
proposals focussed on funding high-quality infectious disease research that
has the potential to deliver significant health impact and develop future
research leaders, with up to £100,000 available per award. More information
can be found here: https://gsk.to/3RUpL4M (https://gsk.to/3RUpL4M)
• GSK has partnered with Amref since 1988, making a positive impact on malaria,
TB, HIV, water/sanitation, health worker training, and health system
strengthening. Collaborations like these are vital, especially now, to
strengthen health systems in lower income countries. Together, GSK and Amref
are dedicated to bringing lasting, sustainable change to countries across
Africa. In January, two new programmes launched on anti-microbial resistance
(AMR) and malaria. First, a three-year malaria programme to strengthen public
healthcare systems for improved diagnosis, treatment, prevention, and
surveillance of malaria cases in Kenya and Zambia. Second, a 12-month AMR
programme which will conduct a review of AMR across the Africa Region to
inform interventions to strengthen AMR programming.
• Performance metrics related to global health and health security are updated
annually with related details in GSK's ESG Performance Report 2022 on page 13.
Environment
Commitment: committed to a net zero, nature-positive, healthier planet with
ambitious goals set for 2030 and 2045.
Progress since Q3 2023:
• In November, GSK announced it will start phase III trials of a low carbon
version of its metered dose inhaler, Ventolin (salbutamol), using a next
generation propellant, in 2024. If successful, it has the potential to reduce
greenhouse gas emissions from use of the inhaler by approximately 90%,
significantly contributing to GSK's ambitious net-zero climate targets as the
current propellant accounts for 49% of GSK's carbon footprint. GSK is
investing £1 billion between 2020 and 2030 to achieve sustainability targets,
including a significant financial commitment towards this programme. More
information can be found here: https://gsk.to/3SeCLDA (https://gsk.to/3SeCLDA)
Environment continued
• GSK's net zero targets were approved by the Science Based Target Initiative's
(SBTi) Corporate Net-Zero Standard, the world's only framework for corporate
net-zero target setting in line with climate science. The targets include an
80% reduction in greenhouse gas emissions by 2030 and a 90% reduction by 2045
target. GSK aims to address the remaining emissions through high quality
offsets.
• Performance metrics related to environment are updated annually with related
details in GSK's ESG Performance Report 2022 on page 16.
Diversity, equity and inclusion
Commitment: create a diverse, equitable and inclusive workplace; enhance
recruitment of diverse patient populations in GSK clinical trials; and support
diverse communities.
Progress since Q3 2023:
• In November, GSK announced the 20 non-profit IMPACT Award winners for their
outstanding contributions to improving health in the Triangle (North Carolina)
and Greater Philadelphia regions. The winners receive $50,000 each to build
their capacity and support their organisations' missions to improve the health
and welfare of individuals in their local communities who are often vulnerable
or marginalised. More information can be found here: https://gsk.to/3vy0bem
(https://gsk.to/3vy0bem)
• Performance metrics related to diversity, equity and inclusion are updated
annually with related details in GSK's ESG Performance Report 2022 on page 23.
Ethical standards
Commitment: promote ethical behaviour across GSK's business by supporting its
employees to do the right thing and working with suppliers that share GSK's
standards and operate responsibly.
• Performance metrics related to ethical standards are updated annually with
related details in GSK's ESG Performance Report 2022 on page 26.
Product governance
Commitment: maintain robust quality and safety processes and responsibly use
data and new technologies.
• Performance metrics related to product governance are updated annually with
related details in GSK's ESG Performance Report 2022 on page 30.
ESG rating performance
Detailed below is how GSK performs in key ESG ratings.
Current Previous
External benchmark score/ranking score/ranking Comments
S&P Global's Corporate Sustainability Assessment 84 86 1st in the pharmaceutical industry group; Assessment conducted annually,
current score updated Nov 2023
Access to Medicines Index 4.06 4.23 Led the bi-annual index since its inception in 2008; Updated bi-annually,
current results from Nov 2022
Antimicrobial resistance benchmark 84% 86% Led the bi-annual benchmark since its inception in 2018; Current ranking
updated Nov 2021
CDP Climate Change A- A- Updated annually, current scores updated Dec 2022 (for supplier engagement,
March 2023)
CDP Water Security B B
CDP Forests (palm oil) A- B
CDP Forests (timber) B B
CDP supplier engagement rating Leader Leader
Sustainalytics 16.7 18.6 1st percentile in pharma subindustry group; Lower score represents lower risk.
Current ranking updated Sept 2023
MSCI AA AA Last rating action date: Sept 2023
Moody's ESG solutions 62 61 Current score updated Aug 2023
ISS Corporate Rating B+ B+ Current score updated June 2023
FTSE4Good Member Member Member since 2004, latest review in June 2023
ShareAction's Workforce Disclosure Initiative 79% 77% Current score updated Jan 2024
Total and Adjusted results
Total reported results represent the Group's overall performance.
GSK also uses a number of adjusted, non-IFRS, measures to report the
performance of its business. Adjusted results and other non-IFRS measures may
be considered in addition to, but not as a substitute for or superior to,
information presented in accordance with IFRS. Adjusted results are defined
below and other non-IFRS measures are defined on page 53.
GSK believes that Adjusted results, when considered together with Total
results, provide investors, analysts and other stakeholders with helpful
complementary information to understand better the financial performance and
position of the Group from period to period, and allow the Group's performance
to be more easily compared against the majority of its peer companies. These
measures are also used by management for planning and reporting purposes. They
may not be directly comparable with similarly described measures used by other
companies.
GSK encourages investors and analysts not to rely on any single financial
measure but to review GSK's quarterly results announcements, including the
financial statements and notes, in their entirety.
GSK is committed to continuously improving its financial reporting, in line
with evolving regulatory requirements and best practice. In line with this
practice, GSK expects to continue to review and refine its reporting
framework.
Adjusted results exclude the profits from discontinued operations from the
Consumer Healthcare business and the following items in relation to our
continuing operations from Total results, together with the tax effects of all
of these items:
• amortisation of intangible assets (excluding computer software and capitalised
development costs)
• impairment of intangible assets (excluding computer software) and goodwill
• major restructuring costs, which include impairments of tangible assets and
computer software, (under specific Board approved programmes that are
structural, of a significant scale and where the costs of individual or
related projects exceed £25 million), including integration costs following
material acquisitions
• transaction-related accounting or other adjustments related to significant
acquisitions
• proceeds and costs of disposal of associates, products and businesses;
significant settlement income; significant legal charges (net of insurance
recoveries) and expenses on the settlement of litigation and government
investigations; other operating income other than royalty income, and other
items
Costs for all other ordinary course smaller scale restructuring and legal
charges and expenses from continuing operations are retained within both Total
and Adjusted results.
As Adjusted results include the benefits of Major restructuring programmes but
exclude significant costs (such as significant legal, major restructuring and
transaction items) they should not be regarded as a complete picture of the
Group's financial performance, which is presented in Total results. The
exclusion of other Adjusting items may result in Adjusted earnings being
materially higher or lower than Total earnings. In particular, when
significant impairments, restructuring charges and legal costs are excluded,
Adjusted earnings will be higher than Total earnings.
GSK has undertaken a number of Major restructuring programmes in response to
significant changes in the Group's trading environment or overall strategy or
following material acquisitions. Within the Pharmaceuticals sector, the highly
regulated manufacturing operations and supply chains and long lifecycle of the
business mean that restructuring programmes, particularly those that involve
the rationalisation or closure of manufacturing or R&D sites are likely to
take several years to complete. Costs, both cash and non-cash, of these
programmes are provided for as individual elements are approved and meet the
accounting recognition criteria. As a result, charges may be incurred over a
number of years following the initiation of a Major restructuring programme.
Significant legal charges and expenses are those arising from the settlement
of litigation or government investigations that are not in the normal course
and materially larger than more regularly occurring individual matters. They
also include certain major legacy matters.
Reconciliations between Total and Adjusted results, providing further
information on the key Adjusting items, are set out on pages 20, 21, 23 and
24.
GSK provides earnings guidance to the investor community on the basis of
Adjusted results. This is in line with peer companies and expectations of the
investor community, supporting easier comparison of the Group's performance
with its peers. GSK is not able to give guidance for Total results as it
cannot reliably forecast certain material elements of the Total results,
particularly the future fair value movements on contingent consideration and
put options that can and have given rise to significant adjustments driven by
external factors such as currency and other movements in capital markets.
ViiV Healthcare
ViiV Healthcare is a subsidiary of the Group and 100% of its operating results
(turnover, operating profit, profit after tax) are included within the Group
income statement.
Earnings are allocated to the three shareholders of ViiV Healthcare on the
basis of their respective equity shareholdings (GSK 78.3%, Pfizer 11.7% and
Shionogi 10%) and their entitlement to preferential dividends, which are
determined by the performance of certain products that each shareholder
contributed. As the relative performance of these products changes over time,
the proportion of the overall earnings allocated to each shareholder also
changes. In particular, the increasing proportion of sales of dolutegravir and
cabotegravir-containing products has a favourable impact on the proportion of
the preferential dividends that is allocated to GSK. Adjusting items are
allocated to shareholders based on their equity interests. GSK was entitled to
approximately 84% of the Total earnings and 83% of the Adjusted earnings of
ViiV Healthcare for 2023.
As consideration for the acquisition of Shionogi's interest in the former
Shionogi-ViiV Healthcare joint venture in 2012, Shionogi received the 10%
equity stake in ViiV Healthcare and ViiV Healthcare also agreed to pay
additional future cash consideration to Shionogi, contingent on the future
sales performance of the products being developed by that joint venture,
dolutegravir and cabotegravir. Under IFRS 3 'Business combinations', GSK was
required to provide for the estimated fair value of this contingent
consideration at the time of acquisition and is required to update the
liability to the latest estimate of fair value at each subsequent period end.
The liability for the contingent consideration recognised in the balance sheet
at the date of acquisition was £659 million. Subsequent remeasurements are
reflected within other operating income/(expense) and within Adjusting items
in the income statement in each period.
Cash payments to settle the contingent consideration are made to Shionogi by
ViiV Healthcare each quarter, based on the actual sales performance and other
income of the relevant products in the previous quarter. These payments reduce
the balance sheet liability and hence are not recorded in the income
statement. The cash payments made to Shionogi by ViiV Healthcare in year ended
31 December 2023 were £1,106 million.
As the liability is required to be recorded at the fair value of estimated
future payments, there is a significant timing difference between the charges
that are recorded in the Total income statement to reflect movements in the
fair value of the liability and the actual cash payments made to settle the
liability.
Further explanation of the acquisition-related arrangements with ViiV
Healthcare are set out on pages 71 and 72 of the Annual Report 2022.
Adjusting items
The reconciliations between Total results and Adjusted results for 2023 and
2022 are set out below.
Year ended 31 December 2023
Total Intangible Intangible Major Trans- Divest- Adjusted
results amort- impair- restruct- action- ments, results
£m isation ment uring related significant £m
£m £m £m £m legal and
other
items
£m
Turnover 30,328 30,328
Cost of sales (8,565) 647 164 13 25 (7,716)
Gross profit 21,763 647 164 13 25 22,612
Selling, general and administration (9,385) 216 13 127 (9,029)
Research and development (6,223) 72 398 2 1 (5,750)
Royalty income 953 953
Other operating income/(expense) (363) 546 (183) -
Operating profit 6,745 719 398 382 572 (30) 8,786
Net finance cost (677) 1 7 (669)
Share of after tax profit/(loss) of associates (5) (5)
and joint venture
Profit/(loss) on disposal of interest in 1 (1) -
associates
Profit before taxation 6,064 719 398 383 572 (24) 8,112
Taxation (756) (154) (94) (83) (100) (70) (1,257)
Tax rate % 12.5% 15.5%
Profit after taxation from continuing 5,308 565 304 300 472 (94) 6,855
operations
Profit attributable to non-controlling 380 192 572
interests from continuing operations
Profit attributable to shareholders from 4,928 565 304 300 280 (94) 6,283
continuing operations
5,308 565 304 300 472 (94) 6,855
Earnings per share from continuing 121.6p 13.9p 7.5p 7.4p 6.9p (2.2)p 155.1p
operations
Weighted average number of shares (millions) 4,052 4,052
Year ended 31 December 2022
Total Profit from Intangible Intangible Major Trans- Divest- Adjusted
results discon- amort- impair- restruct- action- ments, results
£m tinued isation ment uring related significant £m
operations £m £m £m £m legal and
£m other
items
£m
Turnover 29,324 29,324
Cost of sales (9,554) 648 102 45 18 (8,741)
Gross profit 19,770 648 102 45 18 20,583
Selling, general and administration (8,372) 180 13 51 (8,128)
Research and development (5,488) 91 296 39 (5,062)
Royalty income 758 758
Other operating income/(expense) (235) 1,692 (1,457) -
Operating profit 6,433 739 296 321 1,750 (1,388) 8,151
Net finance cost (803) 2 10 (791)
Share of after tax profit/(loss) of (2) (2)
associates and joint ventures
Profit before taxation 5,628 739 296 323 1,750 (1,378) 7,358
Taxation (707) (150) (64) (87) (242) 112 (1,138)
Tax rate % 12.6% 15.5%
Profit after taxation from 4,921 589 232 236 1,508 (1,266) 6,220
continuing operations
Profit after taxation from 3,049 (3,049) -
discontinued operations and
other gains/(losses) from the
demerger
Remeasurement of discontinued 7,651 (7,651) -
operations distributed to
shareholders on demerger
Profit after taxation from 10,700 (10,700) -
discontinued operations
Total profit after taxation 15,621 (10,700) 589 232 236 1,508 (1,266) 6,220
for the period
Profit attributable to non- 460 135 595
controlling interest from
continuing operations
Profit attributable to shareholders 4,461 589 232 236 1,373 (1,266) 5,625
from continuing operations
Profit attributable to non- 205 (205) -
controlling interest from
discontinued operations
Profit attributable to shareholders 10,495 (10,495) -
from discontinued operations
15,621 (10,700) 589 232 236 1,508 (1,266) 6,220
Total profit attributable to 665 (205) 135 595
non-controlling interests
Total profit attributable to 14,956 (10,495) 589 232 236 1,373 (1,266) 5,625
shareholders
15,621 (10,700) 589 232 236 1,508 (1,266) 6,220
Earnings per share from 110.8p 14.6p 5.8p 5.9p 34.1p (31.5p) 139.7p
continuing operations
Earnings per share from 260.6p (260.6)p -
discontinued operations
Total earnings per share 371.4p (260.6)p 14.6p 5.8p 5.9p 34.1p (31.5)p 139.7p
Weighted average number of 4,026 4,026
shares (millions)
Major restructuring and integration
Total Major restructuring charges from continuing operations incurred in 2023
were £382 million (2022: £321 million), analysed as follows:
2023 2022
Cash Non- Total Cash Non- Total
£m cash £m £m cash £m
£m £m
Separation Preparation restructuring 199 117 316 177 110 287
programme
Significant acquisitions 65 1 66 20 - 20
Legacy programmes (1) 1 - 9 5 14
263 119 382 206 115 321
The Separation Preparation programme incurred cash charges of £199 million
primarily from the restructuring of some commercial and administrative
functions as well as Global Supply Chain. The non-cash charges of £117
million primarily reflected the write-down of assets in administrative as well
as manufacturing locations.
The benefit in the year 2023 from restructuring programmes was £0.2 billion,
primarily relating to the Separation Preparation restructuring programme. The
programme is now largely complete and has delivered its target of £1.1
billion of annual savings, with total costs still expected at £2.4 billion,
with slightly higher cash charges of £1.7 billion but lower non-cash charges
of £0.7 billion.
Costs of significant acquisitions relate to integration costs of Sierra
Oncology Inc (Sierra) and Affinivax Inc. (Affinivax) which were acquired in Q3
2022 and Bellus acquired in Q2 2023.
Transaction-related adjustments
Transaction-related adjustments from continuing operations resulted in a net
charge of £572 million (2022: £1,750 million), the majority of which related
to charges/(credits) for the remeasurement of contingent consideration
liabilities, the liabilities for the Pfizer put option, and Pfizer and
Shionogi preferential dividends in ViiV Healthcare.
Charge/(credit) 2023 2022
£m £m
Contingent consideration on former Shionogi-ViiV Healthcare joint Venture 934 1,431
(including Shionogi preferential dividends)
ViiV Healthcare put options and Pfizer preferential dividends (245) 85
Contingent consideration on former Novartis Vaccines business (187) 193
Contingent consideration on acquisition of Affinivax 44 17
Other adjustments 26 24
Total transaction-related charges 572 1,750
The £934 million charge relating to the contingent consideration for the
former Shionogi-ViiV Healthcare joint venture represented an increase in the
valuation of the contingent consideration due to Shionogi, driven by £534
million from updated future sales forecasts and exchange rates, and the unwind
of the discount for £400 million. The £245 million credit relating to the
ViiV Healthcare put option and Pfizer preferential dividends represented a
reduction in the valuation of the put option as a result of updated exchange
rates, sales forecasts and cash balances.
The ViiV Healthcare contingent consideration liability is fair valued under
IFRS. An explanation of the accounting for the non-controlling interests in
ViiV Healthcare is set out on page 19.
The £187 million credit relating to the contingent consideration on the
former Novartis Vaccines business primarily relates to changes to future sales
forecasts.
The £44 million charge relating to the contingent consideration on the
acquisition of Affinivax primarily relates to the unwind of the discount.
Divestments, significant legal charges, and other items
Divestments, significant legal charges, and other items primarily included
£200 million of net income from dividends and milestones related to
investments, including a £49 million dividend received from the retained
investment in Haleon, partly offset by a £17 million fair value loss on the
investment in Haleon. Legal charges provide for all significant legal matters,
including Zantac, and are not broken out separately by litigation or
investigation. Significant legal charges in the year primarily reflected
increased legal charges for Zantac of which the vast majority relate to the
prospective legal costs for the defence of the litigation.
The reconciliations between Total results and Adjusted results for Q4 2023 and
Q4 2022 are set out below.
Three months ended 31 December 2023
Total Intangible Intangible Major Trans- Divest- Adjusted
results amort- impair- restruct- action- ments, results
£m isation ment uring related significant £m
£m £m £m £m legal and
other
items
£m
Turnover 8,052 8,052
Cost of sales (2,418) 170 67 13 5 (2,163)
Gross profit 5,634 170 67 13 5 5,889
Selling, general and administration (2,678) 53 12 25 (2,588)
Research and development (2,047) 14 249 (2) 2 (1,784)
Royalty income 235 235
Other operating income/(expense) (571) 430 141 -
Operating profit 573 184 249 118 455 173 1,752
Net finance cost (193) 2 (191)
Share of after tax profit/(loss) of associates (1) (1)
and joint ventures
Profit before taxation 379 184 249 118 455 175 1,560
Taxation 19 (38) (59) (31) (71) (55) (235)
Tax rate % (5.0%) 15.1%
Profit after taxation from continuing 398 146 190 87 384 120 1,325
operations
Profit attributable to non-controlling 48 104 152
interests from continuing operations
Profit attributable to shareholders from 350 146 190 87 280 120 1,173
continuing operations
398 146 190 87 384 120 1,325
Earnings per share from continuing 8.6p 3.6p 4.7p 2.1p 6.9p 3.0p 28.9p
operations
Weighted average number of shares (millions) 4,056 4,056
Three months ended 31 December 2022
Total Profit from Intangible Intangible Major Trans- Divest- Adjusted
results discon- amort- impair- restruct- action- ments, results
£m tinued isation ment uring related significant £m
operations £m £m £m £m legal and
£m other
items
£m
Turnover 7,376 7,376
Cost of sales (2,238) 147 42 10 9 (2,030)
Gross profit 5,138 147 42 10 9 5,346
Selling, general and administration (2,438) 3 13 (13) (2,435)
Research and development (1,797) 16 240 19 (1,522)
Royalty income 206 206
Other operating income/(expense) 759 (1) (17) (741) -
Operating profit 1,868 163 240 63 6 (745) 1,595
Net finance cost (244) 1 8 (235)
Share of after tax losses of 2 2
associates and joint ventures
Profit before taxation 1,626 163 240 64 6 (737) 1,362
Taxation (1) (31) (54) (36) (5) (45) (172)
Tax rate % 0.1% 12.6%
Profit after taxation from 1,625 132 186 28 1 (782) 1,190
continuing operations
Profit after taxation from (5) 5 -
discontinued operations and
other gains/(losses) from the
demerger
Profit after taxation from (5) 5 -
discontinued operations
Total profit after taxation for 1,620 5 132 186 28 1 (782) 1,190
the period
Profit attributable to non- 125 24 149
controlling interest from
continuing operations
Profit attributable to shareholders 1,500 132 186 28 (23) (782) 1,041
from continuing operations
Profit attributable to non- - - -
controlling interest from
discontinued operations
Profit attributable to (5) 5 -
shareholders from
discontinued operations
1,620 5 132 186 28 1 (782) 1,190
Total profit attributable to 125 - 24 149
non-controlling interests
Total profit attributable to 1,495 5 132 186 28 (23) (782) 1,041
shareholders
1,620 5 132 186 28 1 (782) 1,190
Earnings per share from 37.2p 3.3p 4.6p 0.7p (0.6p) (19.4)p 25.8p
continuing operations
Earnings per share from (0.1p) 0.1p -
discontinued operations
Total earnings per share 37.1p 0.1p 3.3p 4.6p 0.7p (0.6p) (19.4)p 25.8p
Weighted average number of 4,034 4,034
shares (millions)
Major restructuring and integration
Total Major restructuring charges from continuing operations incurred in Q4
2023 were £118 million (Q4 2022: £63 million), analysed as follows:
Q4 2023 Q4 2022
Cash Non- Total Cash Non- Total
£m cash £m £m cash £m
£m £m
Separation Preparation restructuring 92 16 108 100 (54) 46
programme
Significant acquisitions 11 - 11 10 - 10
Legacy programmes (2) 1 (1) 6 1 7
101 17 118 116 (53) 63
The Separation Preparation programme incurred cash charges of £92 million
primarily from the restructuring of some commercial and administrative
functions as well as Global Supply Chain. The non-cash charges of £16 million
primarily reflected the write down of assets in manufacturing locations.
Costs of significant acquisitions relate to integration costs of Sierra and
Affinivax which were acquired in Q3 2022 and Bellus acquired in Q2 2023.
Transaction-related adjustments
Transaction-related adjustments from continuing operations resulted in a net
charge of £455 million (Q4 2022: £6 million) the majority of which related
to charges/credits for the remeasurement of contingent consideration
liabilities, the liabilities for the Pfizer put option, and Pfizer and
Shionogi preferential dividends in ViiV Healthcare.
Charge/(credit) Q4 2023 Q4 2022
£m £m
Contingent consideration on former Shionogi-ViiV Healthcare joint Venture 528 8
(including Shionogi preferential dividends)
ViiV Healthcare put options and Pfizer preferential dividends (42) (116)
Contingent consideration on former Novartis Vaccines business (53) 93
Contingent consideration on acquisition of Affinivax (3) 12
Other adjustments 25 9
Total transaction-related charges 455 6
The £528 million charge relating to the contingent consideration for the
former Shionogi-ViiV Healthcare joint venture represented an increase in the
valuation of the contingent consideration due to Shionogi, driven by £429
million from updated sales forecasts and exchange rates, and the unwind of the
discount for £99 million. The £42 million credit relating to the ViiV
Healthcare put option and Pfizer preferential dividends represented a decrease
in the valuation of the put option primarily as a result of updated exchange
rates partly offset by higher cash balances.
The ViiV Healthcare contingent consideration liability is fair valued under
IFRS. An explanation of the accounting for the non-controlling interests in
ViiV Healthcare is set out on page 19.
The £53 million credit relating to the contingent consideration on the former
Novartis Vaccines business primarily relates to changes to future sales
forecasts.
The £3 million credit relating to the contingent consideration on the
acquisition of Affinivax primarily relates to updated future assumptions,
partly offset by the unwind of the discount.
Divestments, significant legal charges, and other items
Divestments, significant legal charges, and other items primarily included
fair value losses on investments, including a £172 million fair value loss on
the investment in Haleon, partly offset by net income of £31 million
primarily received from equity investments and milestone income. Legal charges
provide for all significant legal matters, including Zantac, and are not
broken out separately by litigation or investigation. Significant legal
charges in the quarter primarily reflected increased legal charges for Zantac.
Financial information
Income statements
2023 2022 Q4 2023 Q4 2022
£m £m £m £m
TURNOVER 30,328 29,324 8,052 7,376
Cost of sales (8,565) (9,554) (2,418) (2,238)
Gross profit 21,763 19,770 5,634 5,138
Selling, general and administration (9,385) (8,372) (2,678) (2,438)
Research and development (6,223) (5,488) (2,047) (1,797)
Royalty income 953 758 235 206
Other operating income/(expense) (363) (235) (571) 759
OPERATING PROFIT 6,745 6,433 573 1,868
Finance income 115 76 29 26
Finance expense (792) (879) (222) (270)
Share of after tax profit/(loss) of associates and joint (5) (2) (1) 2
ventures
Profit/(loss) on disposal of interests in associates 1 - - -
PROFIT BEFORE TAXATION 6,064 5,628 379 1,626
Taxation (756) (707) 19 (1)
Tax rate % 12.5% 12.6% (5.0%) 0.1%
PROFIT AFTER TAXATION FROM CONTINUING OPERATIONS 5,308 4,921 398 1,625
Profit after taxation from discontinued operations - 3,049 - (5)
and other gains from the demerger
Remeasurement of discontinued operations distributed - 7,651 - -
to shareholders on demerger
PROFIT AFTER TAXATION FROM DISCONTINUED OPERATIONS - 10,700 - (5)
PROFIT AFTER TAXATION FOR THE PERIOD 5,308 15,621 398 1,620
Profit attributable to non-controlling interests from 380 460 48 125
continuing operations
Profit attributable to shareholders from continuing 4,928 4,461 350 1,500
operations
Profit attributable to non-controlling interests from - 205 - -
discontinued operations
Profit attributable to shareholders from discontinued - 10,495 - (5)
operations
5,308 15,621 398 1,620
Profit attributable to non-controlling interests 380 665 48 125
Profit attributable to shareholders 4,928 14,956 350 1,495
5,308 15,621 398 1,620
EARNINGS PER SHARE FROM CONTINUING OPERATIONS 121.6p 110.8p 8.6p 37.2p
EARNINGS PER SHARE FROM DISCONTINUED OPERATIONS - 260.6p - (0.1p)
TOTAL EARNINGS PER SHARE 121.6p 371.4p 8.6p 37.1p
Diluted earnings per share from continuing operations 119.9p 109.2p 8.5p 36.6p
Diluted earnings per share from discontinued operations - 257.0p - (0.1p)
Total diluted earnings per share 119.9p 366.2p 8.5p 36.5p
Statement of comprehensive income
2023 2022 Q4 2023 Q4 2022
£m £m £m £m
Total profit for the period 5,308 15,621 398 1,620
Items that may be reclassified subsequently to continuing operations income
statement:
Exchange movements on overseas net assets and (22) 113 65 218
net investment hedges
Reclassification of exchange movements on liquidation (34) 2 (14) (8)
or disposal of overseas subsidiaries and associates
Fair value movements on cash flow hedges (1) (18) (2) (31)
Deferred tax on fair value movements on cash flow 1 9 2 (8)
hedges
Reclassification of cash flow hedges to income 4 14 - 2
statement
(52) 120 51 173
Items that will not be reclassified to continuing operations income statement:
Exchange movements on overseas net assets of (25) (28) (8) (23)
non-controlling interests
Fair value movements on equity investments (244) (754) 115 (106)
Tax on fair value movements on equity investments 14 56 (21) (5)
Fair value movements on cash flow hedges (40) (6) (6) (6)
Remeasurement gains/(losses) on defined benefit plans 71 (786) 287 (104)
Tax on remeasurement losses/(gains) on defined (41) 211 (96) 34
benefit plans
(265) (1,307) 271 (210)
Other comprehensive expense for the period from (317) (1,187) 322 (37)
continuing operations
Other comprehensive income for the period from - 356 - 23
discontinued operations
Total comprehensive income for the period 4,991 14,790 720 1,606
Total comprehensive income for the period attributable to:
Shareholders 4,636 14,153 680 1,504
Non-controlling interests 355 637 40 102
4,991 14,790 720 1,606
Balance sheet
31 December 2023 31 December 2022
£m £m
ASSETS
Non-current assets
Property, plant and equipment 9,020 8,933
Right of use assets 937 687
Goodwill 6,811 7,046
Other intangible assets 14,768 14,318
Investments in associates and joint ventures 55 74
Other investments 1,137 1,467
Deferred tax assets 6,049 5,658
Other non-current assets 1,584 1,194
Total non-current assets 40,361 39,377
Current assets
Inventories 5,498 5,146
Current tax recoverable 373 405
Trade and other receivables 7,385 7,053
Derivative financial instruments 130 190
Current equity investments 2,204 4,087
Liquid investments 42 67
Cash and cash equivalents 2,936 3,723
Assets held for sale 76 98
Total current assets 18,644 20,769
TOTAL ASSETS 59,005 60,146
LIABILITIES
Current liabilities
Short-term borrowings (2,813) (3,952)
Contingent consideration liabilities (1,053) (1,289)
Trade and other payables (15,844) (16,263)
Derivative financial instruments (114) (183)
Current tax payable (500) (471)
Short-term provisions (744) (652)
Total current liabilities (21,068) (22,810)
Non-current liabilities
Long-term borrowings (15,205) (17,035)
Corporation tax payable (75) (127)
Deferred tax liabilities (311) (289)
Pensions and other post-employment benefits (2,340) (2,579)
Other provisions (495) (532)
Contingent consideration liabilities (5,609) (5,779)
Other non-current liabilities (1,107) (899)
Total non-current liabilities (25,142) (27,240)
TOTAL LIABILITIES (46,210) (50,050)
NET ASSETS 12,795 10,096
EQUITY
Share capital 1,348 1,347
Share premium account 3,451 3,440
Retained earnings 7,239 4,363
Other reserves 1,309 1,448
Shareholders' equity 13,347 10,598
Non-controlling interests (552) (502)
TOTAL EQUITY 12,795 10,096
Statement of changes in equity
Share Share Retained Other Share- Non- Total
capital premium earnings reserves holder's controlling equity
£m £m £m £m equity interests £m
£m £m
At 1 January 2023 1,347 3,440 4,363 1,448 10,598 (502) 10,096
Profit for the year 4,928 4,928 380 5,308
Other comprehensive (45) (247) (292) (25) (317)
income/(expense) for the year
Total comprehensive income/(expense) 4,883 (247) 4,636 355 4,991
for the year
Distributions to non-controlling interests (412) (412)
Contributions from non-controlling 7 7
interests
Dividends to shareholders (2,247) (2,247) (2,247)
Realised after tax losses on disposal (26) 26 -
or liquidation of equity investments
Share of associates and joint ventures (7) 7 -
realised profit/(loss) on disposal of equity
investments
Shares issued 1 9 10 10
Write-down on shares held by ESOP (324) 324 -
Trusts
Shares acquired by ESOP Trusts 2 283 (285) -
Share-based incentive plans 307 307 307
Hedging gain/(loss) after taxation 36 36 36
transferred to non-financial assets
Tax on share-based incentive plans 7 7 7
At 31 December 2023 1,348 3,451 7,239 1,309 13,347 (552) 12,795
Share Share Retained Other Share- Non- Total
capital premium earnings reserves holder's controlling equity
£m £m £m £m equity interests £m
£m £m
At 1 January 2022 1,347 3,301 7,944 2,463 15,055 6,287 21,342
Profit for the year 14,956 - 14,956 665 15,621
Other comprehensive (89) (714) (803) (28) (831)
income/(expense) for the year
Total comprehensive income/(expense) 14,867 (714) 14,153 637 14,790
for the year
Distributions to non-controlling interests (1,409) (1,409)
Non-cash distribution to non-controlling (2,960) (2,960)
interests
Contributions from non-controlling 8 8
interests
Changes to non-controlling interest (20) (20)
Deconsolidation of former subsidiaries (3,045) (3,045)
Dividends to shareholders (3,467) (3,467) (3,467)
Non-cash dividend to shareholders (15,526) (15,526) (15,526)
Realised after tax losses on disposal or 14 (14) -
liquidation of equity investments
Share of associates and joint ventures 7 (7) -
realised profits on disposal of equity
investments
Share issued 25 25 25
Write-down of shares held by ESOP Trusts (911) 911 -
Shares acquired by ESOP Trusts 114 1,086 (1,200) -
Share-based incentive plans 357 357 357
Tax on share-based incentive plans (8) (8) (8)
Hedging gain/(loss) after taxation 9 9 9
transferred to non-financial assets
At 31 December 2022 1,347 3,440 4,363 1,448 10,598 (502) 10,096
Cash flow statement year ended 31 December 2023
2023 2022
£m £m
Profit after tax from continuing operations 5,308 4,921
Tax on profits 756 707
Share of after tax loss/(profit) of associates and joint ventures 5 2
(Profit)/loss on disposal of interest in associates and joint ventures (1) -
Net finance expense 677 803
Depreciation, amortisation and other adjusting items 2,849 2,298
Increase/(decrease) in working capital (1,233) 67
Contingent consideration paid (1,134) (1,058)
Decrease in other net liabilities (excluding contingent consideration paid) 869 204
Cash generated from operations attributable to continuing operations 8,096 7,944
Taxation paid (1,328) (1,310)
Net cash inflow/(outflow) from continuing operating activities 6,768 6,634
Cash generated from operations attributable to discontinued operations - 932
Taxation paid from discontinued operations - (163)
Net operating cash flows attributable to discontinued operations - 769
Total net cash inflows/(outflows) from operating activities 6,768 7,403
Cash flow from investing activities
Purchase of property, plant and equipment (1,314) (1,143)
Proceeds from sale of property, plant and equipment 28 146
Purchase of intangible assets (1,030) (1,115)
Proceeds from sale of intangible assets 12 196
Purchase of equity investments (123) (143)
(Increase)/decrease in liquid investments 72 1
Purchase of businesses net of cash acquired (1,457) (3,108)
Proceeds from sale of equity investments 1,832 238
Contingent consideration paid (11) (79)
Disposal of businesses 49 (43)
Investment in associates and joint ventures - (1)
Interest received 115 64
Proceeds from disposal of associates and joint ventures 1 -
Dividend and distributions from investments 220 -
Dividends from associates and joint ventures 11 6
Net cash inflow/(outflow) from continuing investing activities (1,595) (4,981)
Net investing cash flows attributable to discontinued operations - (3,791)
Total net cash inflow/(outflow) from investing activities (1,595) (8,772)
Cash flow from financing activities
Issue of share capital 10 25
Repayment of long-term loans(2) (144) (1,594)
Issue of long-term notes(2) 223 1,025
Repayment of short-term loans(2) (2,116) (5,074)
Net increase/(repayment) of other short-term loans(2) (333) 1,021
Repayment of lease liabilities (197) (202)
Interest paid (766) (848)
Dividends paid to shareholders (2,247) (3,467)
Distribution to non-controlling interests (412) (521)
Contributions from non-controlling interests 7 8
Other financing items 334 376
Net cash inflow/(outflow) from continuing financing activities (5,641) (9,251)
Net financing cash flows attributable to discontinued operations - 10,074
Total net cash inflow/(outflow) from financing activities (5,641) 823
(2) Amended to reflect the gross cash flows with no impact on overall financing
cash flows.
Cash flow statement year ended 31 December 2023 (continued)
2023 2022
£m £m
Increase/(decrease) in cash and bank overdrafts in the year (468) (546)
Cash and bank overdrafts at beginning of the year 3,425 3,819
Exchange adjustments (99) 152
Increase/(decrease) in cash and bank overdrafts (468) (546)
Cash and bank overdrafts at end of the year 2,858 3,425
Cash and bank overdrafts at end of the year comprise:
Cash and cash equivalents 2,936 3,723
Overdrafts (78) (298)
2,858 3,425
Vaccines turnover - year ended 31 December 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Shingles 3,446 16 17 1,880 (4) (4) 908 32 30 658 >100 >100
Shingrix 3,446 16 17 1,880 (4) (4) 908 32 30 658 >100 >100
Meningitis 1,260 13 14 610 6 7 433 20 17 217 20 29
Bexsero 849 13 14 311 (7) (6) 417 24 21 121 46 61
Menveo 380 10 12 299 25 25 12 (40) (45) 69 (19) (13)
Other 31 72 67 - - - 4 (20) (20) 27 >100 >100
RSV 1,238 - - 1,194 - - 4 - - 40 - -
Arexvy 1,238 - - 1,194 - - 4 - - 40 - -
Influenza 504 (29) (29) 371 (32) (32) 39 (32) (33) 94 (13) (10)
Fluarix, FluLaval 504 (29) (29) 371 (32) (32) 39 (32) (33) 94 (13) (10)
Established Vaccines 3,266 6 7 1,254 8 9 742 3 2 1,270 5 7
Infanrix, Pediarix 554 (7) (6) 291 (11) (11) 121 (8) (8) 142 4 10
Boostrix 614 3 4 394 9 10 122 (12) (13) 98 2 4
Hepatitis 611 7 8 336 (2) (1) 177 25 23 98 14 17
Rotarix 614 17 18 192 >100 >100 118 (3) (5) 304 (2) 2
Synflorix 275 (10) (10) - - - 36 6 3 239 (12) (12)
Priorix, Priorix Tetra, 265 41 41 16 60 60 129 33 30 120 48 53
Varilrix
Cervarix 120 3 5 - - - 33 50 45 87 (8) (4)
Other 213 13 11 25 14 9 6 (82) (76) 182 37 34
Vaccines ex COVID 9,714 23 24 5,309 25 26 2,126 16 15 2,279 26 31
Pandemic vaccines 150 >100 >100 - - - 130 >100 >100 20 >100 >100
Pandemic adjuvant 150 >100 >100 - - - 130 >100 >100 20 >100 >100
Vaccines 9,864 24 25 5,309 25 26 2,256 20 18 2,299 27 31
Vaccines turnover - three months ended 31 December 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Shingles 908 18 23 485 1 6 224 10 10 199 >100 >100
Shingrix 908 18 23 485 1 6 224 10 10 199 >100 >100
Meningitis 273 20 26 99 36 47 104 3 3 70 30 41
Bexsero 171 14 21 36 - 11 101 10 10 34 55 82
Menveo 87 13 19 63 70 81 3 (63) (75) 21 (34) (28)
Other 15 >100 >100 - - - - (100) - 15 >100 >100
RSV 529 - - 494 - - 2 - - 33 - -
Arexvy 529 - - 494 - - 2 - - 33 - -
Influenza 95 (66) (64) 53 (76) (73) 18 (38) (41) 24 (20) (20)
Fluarix, FluLaval 95 (66) (64) 53 (76) (73) 18 (38) (41) 24 (20) (20)
Established Vaccines 771 4 8 249 14 20 190 1 1 332 (1) 3
Infanrix, Pediarix 147 32 39 67 40 48 42 40 40 38 15 24
Boostrix 142 8 13 78 7 14 30 (3) (3) 34 26 30
Hepatitis 126 - 6 60 (6) 2 45 25 28 21 (19) (15)
Rotarix 148 1 5 33 57 71 29 (9) (9) 86 (9) (4)
Synflorix 48 (30) (29) - - - 9 (10) (20) 39 (34) (31)
Priorix, Priorix Tetra, 76 52 54 5 (44) (44) 31 29 25 40 >100 >100
Varilrix
Cervarix 10 (62) (58) - - - 3 (57) (71) 7 (63) (53)
Other 74 (11) (12) 6 100 (33) 1 (94) (83) 67 8 10
Vaccines ex COVID 2,576 28 33 1,380 40 46 538 3 3 658 30 38
Pandemic vaccines 7 (88) (86) - - - 7 (88) (86) - >(100) >(100)
Pandemic adjuvant 7 (88) (86) - - - 7 (88) (86) - >(100) >(100)
Vaccines 2,583 25 29 1,380 40 46 545 (6) (6) 658 30 37
Specialty Medicines turnover - year ended 31 December 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
HIV 6,444 12 13 4,283 14 14 1,423 9 7 738 8 16
Dolutegravir products 5,408 4 5 3,418 3 4 1,290 4 3 700 9 17
Tivicay 1,386 - 2 801 (3) (2) 267 (2) (4) 318 12 21
Triumeq 1,542 (14) (14) 1,074 (12) (11) 280 (22) (24) 188 (15) (11)
Juluca 661 4 4 511 3 4 136 7 6 14 (7) (7)
Dovato 1,819 32 33 1,032 33 33 607 27 25 180 50 59
Rukobia 117 43 44 110 39 41 7 >100 >100 - - -
Cabenuva 708 >100 >100 587 100 >100 103 >100 >100 18 >100 >100
Apretude 149 >100 >100 149 >100 >100 - - - - - -
Other 62 (35) (33) 19 (39) (42) 23 (18) (25) 20 (44) (31)
Respiratory/Immunology 3,025 16 18 2,100 15 15 468 28 26 457 11 21
and Other
Nucala 1,655 16 18 978 11 11 383 28 26 294 21 33
Benlysta 1,349 18 19 1,121 18 19 99 19 18 129 13 25
Other 21 (48) (42) 1 - - (14) 18 12 34 (40) (33)
Oncology 731 21 23 396 27 27 289 14 13 46 28 61
Zejula 523 13 15 257 9 10 222 14 12 44 29 65
Blenrep 36 (69) (69) (2) >(100) >(100) 38 (27) (27) - - -
Jemperli 141 >100 >100 108 >100 >100 31 >100 >100 2 >100 >100
Ojjaara 33 - - 33 - - - - - - - -
Other (2) >(100) >(100) - - - (2) (100) - - >(100) (100)
Specialty Medicines 10,200 14 15 6,779 15 15 2,180 13 11 1,241 10 19
ex COVID
Pandemic 44 (98) (98) 10 (99) (99) 3 (99) (99) 31 (97) (97)
Xevudy 44 (98) (98) 10 (99) (99) 3 (99) (99) 31 (97) (97)
Specialty Medicines 10,244 (9) (8) 6,789 1 1 2,183 (8) (10) 1,272 (41) (36)
Specialty Medicines turnover - three months ended 31 December 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
HIV 1,773 6 10 1,222 5 9 374 9 8 177 4 18
Dolutegravir products 1,445 (2) 2 946 (5) (1) 333 4 4 166 1 12
Tivicay 349 (6) - 213 (9) (5) 68 (1) (1) 68 (1) 17
Triumeq 403 (16) (13) 292 (14) (10) 66 (20) (19) 45 (20) (16)
Juluca 177 (8) (5) 140 (10) (6) 33 3 6 4 (20) (40)
Dovato 516 18 21 301 12 17 166 22 21 49 44 56
Rukobia 35 35 42 34 36 40 2 >100 >100 (1) - -
Cabenuva 223 73 78 185 65 71 32 >100 >100 6 >100 >100
Apretude 52 >100 >100 52 >100 >100 - - - - - -
Other 18 (10) - 5 (29) (43) 7 (13) (25) 6 20 >100
Respiratory/Immunology 863 20 25 625 22 27 125 33 33 113 (2) 13
and Other
Nucala 471 19 25 292 21 25 102 20 20 77 13 29
Benlysta 389 19 25 333 23 28 26 13 13 30 (6) 9
Other 3 >100 >100 - - - (3) 79 79 6 (60) (53)
Oncology 244 55 62 163 >100 >100 70 4 4 11 (8) 50
Zejula 152 22 28 85 35 40 56 8 8 11 10 60
Blenrep 6 (78) (78) - (100) (100) 6 (63) (62) - - -
Jemperli 60 >100 >100 49 >100 >100 10 >100 >100 1 >100 >100
Ojjaara 29 - - 29 - - - - - - - -
Other (3) >(100) >(100) - - - (2) (100) >(100) (1) >(100) (50)
Specialty Medicines 2,880 13 17 2,010 15 19 569 13 12 301 1 17
ex COVID
Pandemic 13 (90) (90) 11 10 10 2 (89) (89) - >(100) (100)
Xevudy 13 (90) (90) 11 10 10 2 (89) (89) - >(100) (100)
Specialty Medicines 2,893 8 12 2,021 15 19 571 9 9 301 (24) (11)
General Medicines turnover - year ended 31 December 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Respiratory 6,825 4 6 3,442 7 8 1,402 1 - 1,981 1 9
Arnuity Ellipta 36 (36) (34) 29 (40) (40) - - - 7 (13) -
Anoro Ellipta 557 15 16 269 15 16 193 17 15 95 12 20
Avamys/Veramyst 299 (7) (4) - - - 57 (12) (14) 242 (5) (2)
Flixotide/Flovent 451 (17) (16) 283 (20) (20) 70 (5) (5) 98 (17) (11)
Incruse Ellipta 162 (17) (17) 78 (25) (24) 59 (8) (9) 25 (11) (7)
Relvar/Breo Ellipta 1,103 (4) (2) 436 (12) (12) 366 5 4 301 - 8
Seretide/Advair 1,139 (2) 1 341 11 11 256 (11) (12) 542 (4) 3
Trelegy Ellipta 2,202 27 29 1,606 28 29 275 17 16 321 34 44
Ventolin 749 (3) - 400 (3) (2) 100 (14) (16) 249 2 11
Other Respiratory 127 (11) (5) - (100) (100) 26 (13) (17) 101 (10) (1)
Other General Medicines 3,395 (5) 2 280 (23) (22) 723 4 2 2,392 (5) 6
Dermatology 363 (3) 4 - - - 107 - (1) 256 (5) 6
Augmentin 628 9 17 - - - 186 23 21 442 4 16
Avodart 345 5 7 - - - 109 2 (1) 236 6 10
Lamictal 435 (15) (13) 194 (27) (27) 111 2 1 130 (5) 4
Other 1,624 (9) 1 86 (13) (11) 210 (5) (7) 1,328 (9) 3
General Medicines 10,220 1 5 3,722 4 5 2,125 2 1 4,373 (2) 7
General Medicines turnover - three months ended 31 December 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Respiratory 1,746 4 9 913 17 22 362 (3) (3) 471 (11) (2)
Arnuity Ellipta 10 (9) - 8 (11) - - - - 2 - -
Anoro Ellipta 155 12 16 78 15 19 51 9 9 26 13 22
Avamys/Veramyst 49 (40) (37) - - - 12 (14) (14) 37 (46) (41)
Flixotide/Flovent 100 (25) (21) 58 (23) (17) 20 (9) (9) 22 (41) (35)
Incruse Ellipta 40 3 5 19 19 31 15 (6) (12) 6 (14) (14)
Relvar/Breo Ellipta 302 21 27 129 79 85 95 1 2 78 (6) 4
Seretide/Advair 276 (16) (12) 78 (26) (22) 65 (13) (12) 133 (11) (4)
Trelegy Ellipta 589 29 35 430 34 40 72 11 11 87 23 34
Ventolin 198 (4) 2 113 2 6 28 (15) (15) 57 (8) 3
Other Respiratory 27 (25) (19) - - - 4 (50) (63) 23 (15) 4
Other General Medicines 830 (12) (2) 66 (31) (25) 179 1 - 585 (12) -
Dermatology 85 (14) (6) - - - 26 (7) (4) 59 (18) (8)
Augmentin 159 (5) 5 - - - 49 11 9 110 (11) 3
Avodart 73 (11) (7) - - - 22 (15) (19) 51 (9) (2)
Lamictal 108 (18) (14) 49 (31) (30) 28 (3) - 31 (3) 9
Other 405 (12) - 17 (32) (16) 54 6 4 334 (13) 1
General Medicines 2,576 (2) 5 979 12 17 541 (2) (2) 1,056 (12) (1)
Commercial Operations turnover
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Year ended 31 December 2023 30,328 3 5 15,820 9 9 6,564 3 2 7,944 (6) 1
Three months ended 31 December 2023 8,052 9 15 4,380 21 26 1,657 - - 2,015 (4) 6
Commercial Operations turnover ex COVID
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Year ended 31 December 2023 30,134 12 14 15,810 15 16 6,431 10 8 7,893 7 15
Three months ended 31 December 2023 8,032 12 17 4,369 21 26 1,648 4 4 2,015 1 12
Segment information
Operating segments are reported based on the financial information provided to
the Chief Executive Officer and the responsibilities of the GSK Leadership
Team (GLT). GSK reports results under two segments: Commercial Operations and
Total R&D. Members of the GLT are responsible for each segment.
R&D investment is essential for the sustainability of the business.
However, for segment reporting the Commercial operating profits exclude
allocations of globally funded R&D.
The Total R&D segment is the responsibility of the Chief Scientific
Officer and is reported as a separate segment. The operating costs of this
segment includes R&D activities across Specialty Medicines, including HIV
and Vaccines. It includes R&D and some SG&A costs relating to
regulatory and other functions.
The Group's management reporting process allocates intra-Group profit on a
product sale to the market in which that sale is recorded, and the profit
analyses below have been presented on that basis.
Turnover by segment
2023 2022 Growth Growth
£m £m £% CER%
Commercial Operations (total turnover) 30,328 29,324 3 5
Operating profit by segment
2023 2022 Growth Growth
£m £m £% CER%
Commercial Operations 14,656 13,590 8 10
Research and Development (5,607) (5,060) 11 11
Segment profit 9,049 8,530 6 10
Corporate and other unallocated costs (263) (379)
Adjusted operating profit 8,786 8,151 8 12
Adjusting items (2,041) (1,718)
Total operating profit 6,745 6,433 5 10
Finance income 115 76
Finance costs (792) (879)
Share of after tax profit/(loss) of associates (5) (2)
and joint ventures
Profit/(loss) on disposal of associates and joint 1 -
ventures
Profit before taxation from continuing operations 6,064 5,628 8 14
Adjusting items reconciling segment profit and operating profit comprise items
not specifically allocated to segment profit. These include impairment and
amortisation of intangible assets, major restructuring costs, which include
impairments of tangible assets and computer software, transaction-related
adjustments related to significant acquisitions, proceeds and costs of
disposals of associates, products and businesses, significant legal charges
and expenses on the settlement of litigation and government investigations,
other operating income other than royalty income and other items.
Turnover by segment
Q4 2023 Q4 2022 Growth Growth
£m £m £% CER%
Commercial Operations (total turnover) 8,052 7,376 9 15
Operating profit by segment
Q4 2023 Q4 2022 Growth Growth
£m £m £% CER%
Commercial Operations 3,612 3,219 12 20
Research and Development (1,731) (1,512) 14 17
Segment profit 1,881 1,707 10 22
Corporate and other unallocated costs (129) (112)
Adjusted operating profit 1,752 1,595 10 21
Adjusting items (1,179) 273
Total operating profit 573 1,868 (69) (60)
Finance income 29 26
Finance costs (222) (270)
Share of after tax profit/(loss) of associates (1) 2
and joint ventures
Profit before taxation from continuing operations 379 1,626 (77) (67)
Legal matters
The Group is involved in significant legal and administrative proceedings,
principally product liability, intellectual property, tax, anti-trust,
consumer fraud and governmental investigations, which are more fully described
in the 'Legal Proceedings' note in the Annual Report 2022. At 31 December
2023, the Group's aggregate provision for legal and other disputes (not
including tax matters described on page 11) was £0.3 billion (31 December
2022: £0.2 billion).
The Group may become involved in significant legal proceedings in respect of
which it is not possible to meaningfully assess whether the outcome will
result in a probable outflow, or to quantify or reliably estimate the
liability, if any, that could result from ultimate resolution of the
proceedings. In these cases, the Group would provide appropriate disclosures
about such cases, but no provision would be made.
The ultimate liability for legal claims may vary from the amounts provided and
is dependent upon the outcome of litigation proceedings, investigations and
possible settlement negotiations. The Group's position could change over time,
and, therefore, there can be no assurance that any losses that result from the
outcome of any legal proceedings will not exceed by a material amount the
amount of the provisions reported in the Group's financial accounts.
Significant legal developments since the date of the Q3 2023 results:
Product Liability
Zantac
The Delaware Superior Court held a hearing regarding admissibility of expert
testimony as to general causation on 22-24 January 2024.
In the California Judicial Council Coordination Proceedings (JCCP), the Court
has scheduled the next bellwether case (Browne) for trial on 20 February 2024
with a Sargon hearing scheduled for 1-2 February 2024. The remaining
bellwether cases in the JCCP are set for transfer to other counties for trial
beginning in Q2 2024. Cases in other state courts are scheduled for trials
beginning in Q2 2024.
GSK will continue to defend itself vigorously against all claims.
Given the current stage of the proceedings, GSK cannot meaningfully assess
what liability, if any, it may have, nor can it meaningfully assess the
liability of other parties under relevant indemnification provisions.
Returns to shareholders
Quarterly dividends
The Board has declared a fourth interim dividend for 2023 of 16.00p per share
(Q4 2022: 13.75p(3) per share).
Dividends remain an essential component of total shareholder return and GSK
recognises the importance of dividends to shareholders. On 23 June 2021, at
the GSK Investor Update, GSK set out that from 2022 a progressive dividend
policy will be implemented guided by a 40 to 60 percent pay-out ratio through
the investment cycle. Consistent with this, and reflecting strong business
performance during the year, GSK now expects to declare an increased dividend
of 16.00p for Q4 2023 and 58.00p per share for full year 2023. The expected
dividend for 2024 is 60.00p. In setting its dividend policy, GSK considers the
capital allocation priorities of the Group and its investment strategy for
growth alongside the sustainability of the dividend.
Payment of dividends
The equivalent interim dividend receivable by ADR holders will be calculated
based on the exchange rate on 9 April 2024. An annual fee of $0.03 per ADS (or
$0.0075 per ADS per quarter) is charged by the Depositary. The ex-dividend
date will be 22 February 2024, with a record date of 23 February 2024 and a
payment date of 11 April 2024.
Paid/ Pence per Pence per £m
Payable share/ share/
pre share post share
consolidation consolidation
2023
First interim 13 July 2023 - 14.00 567
Second interim 12 October 2023 - 14.00 568
Third interim 11 January 2024 - 14.00 568
Fourth interim 11 April 2024 - 16.00 649
- 58.00 2,352
2022
First interim 1 July 2022 14 17.50 704
Second interim 6 October 2022 13 16.25 654
Third interim 12 January 2023 11 13.75 555
Fourth interim 13 April 2023 11 13.75 557
49 61.25 2,470
(3) Adjusted for the Share Consolidation on 18 July 2022. For details of the Share
Consolidation see page 53.
Weighted average number of shares
2023 2022
millions millions
Weighted average number of shares - basic 4,052 4,026
Dilutive effect of share options and share awards 59 58
Weighted average number of shares - diluted 4,111 4,084
Weighted average number of shares
Q4 2023 Q4 2022
millions millions
Weighted average number of shares - basic 4,056 4,034
Dilutive effect of share options and share awards 60 57
Weighted average number of shares - diluted 4,116 4,091
At 31 December 2023, 4,056 million shares (2022: 4,034 million) were in free
issue (excluding Treasury shares and shares held by the ESOP Trusts). No
Treasury shares have been repurchased since 2014. The company issued 0.8
million shares under employee share schemes in the year for proceeds of £10
million (2022: £25 million).
At 31 December 2023, the ESOP Trusts held 58.5 million GSK shares against the
future exercise of share options and share awards. The carrying value of
£288 million has been deducted from other reserves. The market value of
these shares was £853 million.
At 31 December 2023, the company held 197 million Treasury shares at a cost
of £3,447 million which has been deducted from retained earnings.
Additional information
Disposal group and discontinued operations accounting policy
Disposal groups are classified as held for distribution if their carrying
amount will be recovered principally through a distribution to shareholders
rather than through continuing use, they are available for distribution in
their present condition and the distribution is considered highly probable.
They are measured at the lower of their carrying amount and fair value less
costs to distribute.
Non-current assets included as part of a disposal group are not depreciated or
amortised while they are classified as held for distribution. The assets and
liabilities of a disposal group classified as held for distribution are
presented separately from the other assets and liabilities in the balance
sheet.
A discontinued operation is a component of the entity that has been disposed
of or distributed or is classified as held for distribution and that
represents a separate major line of business. The results of discontinued
operations are presented separately in the statement of profit or loss and
comparatives are restated on a consistent basis.
IAS 12 'Income Taxes'
On 20 June 2023, the UK Government substantively enacted legislation
introducing a global minimum corporate income tax rate, to have effect from
2024 in line with the Organisation for Economic Co-operation and Development's
(OECD) Pillar Two model framework. GSK has applied the mandatory IAS 12
'Income Taxes' exception under paragraph 98 M (b) and is not recognising any
deferred tax impact.
Accounting policies and basis of preparation
This unaudited Results Announcement contains condensed financial information
for the year-end and three months ended 31 December 2023 and should be read
in conjunction with the Annual Report 2022, which was prepared in accordance
with United Kingdom adopted International Financial Reporting Standards. This
Results Announcement has been prepared applying consistent accounting policies
to those applied by the Group in the Annual Report 2022.
The Group has not identified any changes to its key sources of accounting
judgements or estimations of uncertainty compared with those disclosed in the
Annual Report 2022.
This Results Announcement does not constitute statutory accounts of the Group
within the meaning of sections 434(3) and 435(3) of the Companies Act 2006.
The full Group accounts for 2022 were published in the Annual Report 2022,
which has been delivered to the Registrar of Companies and on which the report
of the independent auditor was unqualified and did not contain a statement
under section 498 of the Companies Act 2006.
Exchange rates
GSK operates in many countries and earns revenues and incurs costs in many
currencies. The results of the Group, as reported in Sterling, are affected by
movements in exchange rates between Sterling and other currencies. Average
exchange rates, as modified by specific transaction rates for large
transactions, prevailing during the period, are used to translate the results
and cash flows of overseas subsidiaries, associates and joint ventures into
Sterling. Period-end rates are used to translate the net assets of those
entities. The currencies which most influenced these translations and the
relevant exchange rates were:
2023 2022 Q4 2023 Q4 2022
Average rates:
US$/£ 1.24 1.24 1.25 1.19
Euro/£ 1.15 1.17 1.15 1.15
Yen/£ 175 161 183 165
Period-end rates:
US$/£ 1.27 1.20 1.27 1.20
Euro/£ 1.15 1.13 1.15 1.13
Yen/£ 180 159 180 159
Net assets
The book value of net assets increased by £2,699 million from £10,096
million at 31 December 2022 to £12,795 million at 31 December 2023. This
primarily reflected contribution from Total comprehensive income for the
period partly offset by dividends paid to shareholders.
At 31 December 2023, the net deficit on the Group's pension plans was £764
million compared with £1,355 million at 31 December 2022. This decrease in
the net deficit is primarily due to higher asset values, cash contributions of
£353 million made to the UK Pension Schemes and updated mortality
assumptions, partly offset by an actuarial experience adjustment for higher
inflation than expected in UK pension increases of approximately £360
million.
The estimated present value of the potential redemption amount of the Pfizer
put option related to ViiV Healthcare, recorded in Other payables in Current
liabilities, was £848 million (31 December 2022: £1,093 million).
Contingent consideration amounted to £6,662 million at 31 December 2023
(31 December 2022: £7,068 million), of which £5,718 million (31 December
2022: £5,890 million) represented the estimated present value of amounts
payable to Shionogi relating to ViiV Healthcare, £423 million (31 December
2022: £673 million) represented the estimated present value of contingent
consideration payable to Novartis related to the Vaccines acquisition and
£516 million (31 December 2022: £501 million) represented the estimated
present value of contingent consideration payable to Affinivax. Of the
contingent consideration payable to Shionogi at 31 December 2023, £1,017
million (31 December 2022: £940 million) is expected to be paid within one
year.
Movements in contingent consideration are as follows:
2023 ViiV Group
Healthcare £m
£m
Contingent consideration at beginning of the period 5,890 7,068
Remeasurement through income statement and other movements 934 739
Cash payments: operating cash flows (1,106) (1,134)
Cash payments: investing activities - (11)
Contingent consideration at end of the period 5,718 6,662
2022 ViiV Group
Healthcare £m
£m
Contingent consideration at beginning of the period 5,559 6,076
Remeasurement through income statement and other movements 1,431 2,129
Cash payments: operating cash flows (1,031) (1,058)
Cash payments: investing activities (69) (79)
Contingent consideration at end of the period 5,890 7,068
The liabilities for the Pfizer put option and the contingent consideration at
31 December 2023 have been calculated based on the period-end exchange rates,
primarily US$ 1.27/£1 and €1.15/£1. Sensitivity analyses for the Pfizer
put option and each of the largest contingent consideration liabilities are
set out below for the following scenarios:
Increase/(decrease) in financial liability and loss/(gain) in Income statement ViiV Shionogi-ViiV Healthcare Novartis Affinivax
Healthcare contingent Vaccines contingent
put option consideration contingent consideration
£m £m consideration £m
£m
10% increase in sales forecasts* 84 539 63 n/a
15% increase in sales forecasts* 126 807 94 n/a
10% decrease in sales forecasts* (84) (539) (62) n/a
15% decrease in sales forecasts* (126) (808) (92) n/a
1% (100 basis points) increase in discount rate (18) (174) (26) (12)
1.5% (150 basis points) increase in discount rate (26) (256) (38) (18)
1% (100 basis points) decrease in discount rate 19 184 30 13
1.5% (150 basis points) decrease in discount rate 28 281 47 19
10 cent appreciation of US Dollar 54 386 11 44
15 cent appreciation of US Dollar 85 604 17 69
10 cent depreciation of US Dollar (46) (330) (8) (38)
15 cent depreciation of US Dollar (67) (478) (12) (54)
10 cent appreciation of Euro 22 91 19 n/a
15 cent appreciation of Euro 34 144 30 n/a
10 cent depreciation of Euro (18) (79) (16) n/a
15 cent depreciation of Euro (26) (113) (22) n/a
10% increase in probability of milestone success n/a n/a 21 75
10% decrease in probability of milestone success n/a n/a (10) (75)
* The sales forecast is for ViiV Healthcare sales only in respect of the ViiV
Healthcare put option and the Shionogi-ViiV Healthcare contingent
consideration.
Contingent liabilities
There were contingent liabilities at 31 December 2023 in respect of
arrangements entered into as part of the ordinary course of the Group's
business. No material losses are expected to arise from such contingent
liabilities. Provision is made for the outcome of legal and tax disputes where
it is both probable that the Group will suffer an outflow of funds and it is
possible to make a reliable estimate of that outflow. Descriptions of the
significant legal disputes to which the Group is a party are set out on page
38 and on pages 265 to 267 of the 2022 Annual Report.
Business acquisitions
On 18 April 2023, GSK announced it had reached agreement to acquire late-stage
biopharmaceutical company Bellus. On 28 June 2023, GSK completed the
acquisition which was effected through a Plan of Arrangement (the
"Arrangement") pursuant to the Canada Business Corporations Act. The
Arrangement was approved by Bellus' shareholders on 16 June 2023. Upon
completion, GSK acquired all outstanding common shares of Bellus for US$14.75
per common share in cash, representing a total equity value of US$2 billion
(£1.6 billion). The acquisition provides GSK access to camlipixant, a
potential best-in-class and highly selective P2X3 antagonist currently in
phase III development for the first-line treatment of adult patients with
refractory chronic cough (RCC).
The provisional fair values of the net assets acquired, including goodwill,
are as follows:
£m
Net assets acquired:
Intangible assets 1,438
Cash and cash equivalents 148
Other net assets/(liabilities) 46
Deferred tax liabilities (136)
1,496
Goodwill 109
Total consideration 1,605
All of the £1.6 billion consideration had been settled by 30 September 2023.
Net debt information
Reconciliation of cash flow to movements in net debt
2023 2022
£m £m
Total Net debt at beginning of the period (17,197) (19,838)
Increase/(decrease) in cash and bank overdrafts (468) (7,597)
(Increase)/decrease in liquid investments (72) (1)
Repayment of short-term loans 2,116 5,074
Net increase/(repayment) of other short-term loans 333 (1,021)
Issue of long-term notes (223) (1,025)
Repayment of long-term loans 144 1,594
Repayment of lease liabilities 197 202
Net debt of subsidiary undertakings acquired 50 (24)
Exchange adjustments 554 (1,531)
Other non-cash movements (474) (207)
Decrease/(increase) in net debt from continuing operations 2,157 (4,536)
Decrease/(increase) in net debt from discontinued operations - 7,177
Total Net debt at end of the period (15,040) (17,197)
Net debt analysis
31 December 31 December
2023 2022
£m £m
Liquid investments 42 67
Cash and cash equivalents 2,936 3,723
Short-term borrowings (2,813) (3,952)
Long-term borrowings (15,205) (17,035)
Total Net debt at the end of the period (15,040) (17,197)
Free cash flow reconciliation from continuing operations
2023 2022 Q4 2023
£m £m £m
Net cash inflow/(outflow) from continuing operating activities 6,768 6,634 3,196
Purchase of property, plant and equipment (1,314) (1,143) (486)
Proceeds from sale of property, plant and equipment 28 146 7
Purchase of intangible assets (1,030) (1,115) (297)
Proceeds from disposals of intangible assets 12 196 -
Net finance costs (651) (784) (254)
Dividends and disposal proceeds from associates and joint ventures 12 6 11
Contingent consideration paid (reported in investing activities) (11) (79) (4)
Distributions to non-controlling interests (412) (521) (78)
Contributions from non-controlling interests 7 8 -
Free cash inflow/(outflow) from continuing operations 3,409 3,348 2,095
Post balance sheet event note
On 9 January 2024, GSK announced it had entered into an agreement to acquire
Aiolos Bio, Inc, (Aiolos) a clinical-stage biopharmaceutical company focused
on addressing the unmet treatment needs of patients with certain respiratory
and inflammatory conditions, for an upfront payment of US$1 billion and up to
US$400 million in certain success-based regulatory milestone payments. In
addition, GSK will also be responsible for success-based milestone payments as
well as tiered royalties owed to Jiangsu Hengrui Pharmaceuticals Co., Ltd.
(Hengrui). The transaction is subject to customary conditions, including
applicable regulatory agency clearances under the Hart-Scott-Rodino Act in the
US and is expected to close in the first quarter of 2024.
GSK completed the sale of 300 million shares in Haleon equivalent to 3.2% of
Haleon's issued share capital on 17 January 2024 at a price of 326 pence per
share, raising gross proceeds of £978 million. Following the sale, GSK will
hold approximately 385 million ordinary shares in Haleon, representing over 4%
of the issued share capital of Haleon.
Related party transactions
Details of GSK's related party transactions are disclosed on page 236 of our
2022 Annual Report.
R&D commentary
Pipeline overview
Medicines and vaccines in phase III development (including major lifecycle 18 Infectious Diseases (7)
innovation or under regulatory review)
• Arexvy (RSV vaccine) RSV older adults
• gepotidacin (bacterial topoisomerase inhibitor) uncomplicated urinary tract
infection and urogenital gonorrhoea
• bepirovirsen (HBV ASO) hepatitis B virus
• Bexsero infants vaccine (US)
• MenABCWY (gen 1) vaccine candidate
• tebipenem pivoxil (antibacterial carbapenem) complicated urinary tract
infection
• ibrexafungerp (antifungal glucan synthase inhibitor) invasive candidiasis
Respiratory/Immunology (5)
• Nucala (anti-IL5) chronic obstructive pulmonary disease
• depemokimab (long-acting anti-IL5) severe eosinophilic asthma, eosinophilic
granulomatosis with polyangiitis, chronic rhinosinusitis with nasal polyps,
hyper-eosinophilic syndrome
• latozinemab (AL001, anti-sortilin) frontotemporal dementia
• camlipixant (P2X3 receptor antagonist) refractory chronic cough
• Ventolin (salbutamol, Beta 2 adrenergic receptor agonist) asthma
Oncology (5)
• Ojjaara (JAK1, JAK2 and ACVR1 inhibitor) myelofibrosis with anaemia
• Blenrep (anti-BCMA ADC) multiple myeloma
• Jemperli (anti-PD-1) 1L endometrial cancer
• Zejula (PARP inhibitor) 1L ovarian and non-small cell lung cancer
• cobolimab (anti-TIM-3) 2L non-small cell lung cancer
Opportunity driven (1)
• linerixibat (IBATi) cholestatic pruritus in primary biliary cholangitis
Total vaccines and medicines in all phases of clinical development 71
Total projects in clinical development (inclusive of all phases and 89
indications)
Our key growth assets by therapy area
The following outlines several key vaccines and medicines by therapy area that
will help drive growth for GSK to meet its outlooks for 2021-2026 and beyond.
Infectious Diseases
Arexvy (respiratory syncytial virus vaccine, adjuvanted)
The European Medicines Agency (EMA) and The Japanese Ministry of Health,
Labour and Welfare (MHLW) accepted for review regulatory applications to
extend the indication of Arexvy (respiratory syncytial virus vaccine,
recombinant adjuvanted) for the prevention of RSV disease in adults aged 50-59
at increased risk. GSK is the first company to seek regulatory approval to
extend RSV vaccination to help protect adults aged 50 to 59 at increased risk
for RSV disease.
Key phase III trials for Arexvy:
Trial name (population) Phase Design Timeline Status
RSV OA=ADJ-004 III A randomised, open-label, multi-country trial to evaluate the immunogenicity, Trial start: Active, not recruiting; primary endpoint met
safety, reactogenicity and persistence of a single dose of the RSVPreF3 OA
(Adults ≥ 60 years old) investigational vaccine and different revaccination schedules in adults aged Q1 2021
60 years and above
NCT04732871 Primary data reported:
Q2 2022
RSV OA=ADJ-006 III A randomised, placebo-controlled, observer-blind, multi-country trial to Trial start: Active, not recruiting; primary endpoint met
demonstrate the efficacy of a single dose of GSK's RSVPreF3 OA investigational
(ARESVI-006; Adults ≥ 60 years old) vaccine in adults aged 60 years and above Q2 2021
NCT04886596 Primary data reported:
Q2 2022;
two season data reported:
Q2 2023
RSV OA=ADJ-007 III An open-label, randomised, controlled, multi-country trial to evaluate the Trial start: Complete; primary endpoint met
immune response, safety and reactogenicity of RSVPreF3 OA investigational
(Adults ≥ 60 years old) vaccine when co-administered with FLU-QIV vaccine in adults aged 60 years and Q2 2021
above
NCT04841577 Primary data reported:
Q4 2022
RSV OA=ADJ-008 III A phase III, open-label, randomised, controlled, multi country trial to Trial start: Complete
evaluate the immune response, safety and reactogenicity of RSVPreF3 OA
investigational vaccine when co-administered with FLU HD vaccine in adults Q4 2022
aged 65 years and above
(Adults ≥ 65 years old)
Primary data reported:
NCT05559476 Q2 2023
RSV OA=ADJ-009 III A randomised, double-blind, multi-country trial to evaluate consistency, Trial start: Complete; primary endpoint met
safety, and reactogenicity of 3 lots of RSVPreF3 OA investigational vaccine
(Adults ≥ 60 years old) administrated as a single dose in adults aged 60 years and above Q4 2021
NCT05059301 Trial end:
Q2 2022
RSV OA=ADJ-017 III A phase III, open-label, randomised, controlled, multi-country trial to Trial start: Complete
evaluate the immune response, safety and reactogenicity of an RSVPreF3 OA
(Adults ≥ 65 years old) investigational vaccine when co-administered with FLU aQIV (inactivated Q4 2022
influenza vaccine - adjuvanted) in adults aged 65 years and above
NCT05568797 Primary data reported:
Q2 2023
RSV OA=ADJ-018 III A phase III, observer-blind, randomised, placebo-controlled trial to evaluate Trial start: Active, not recruiting; primary endpoint met
the non-inferiority of the immune response and safety of the RSVPreF3 OA
(Adults 50-59 years) investigational vaccine in adults 50-59 years of age, including adults at Q4 2022
increased risk of respiratory syncytial virus lower respiratory tract disease,
compared to older adults ≥60 years of age
NCT05590403 Primary data reported:
Q4 2023
RSV OA=ADJ-019 III An open-label, randomised, controlled, multi-country trial to evaluate the Trial start: Active, not recruiting
immune response, safety and reactogenicity of RSVPreF3 OA investigational
(Adults ≥ 60 years old) vaccine when co-administered with PCV20 in adults aged 60 years and older Q2 2023
Data anticipated:
NCT05879107 H2 2024
Key phase III trials for Arexvy (continued):
Trial name (population) Phase Design Timeline Status
RSV OA=ADJ-023 IIb A randomised, controlled, open-label trial to evaluate the immune response and Trial start: Active, recruiting
safety of the RSVPreF3 OA investigational vaccine in adults (≥50 years of
(Immunocompromised Adults 50-59 years) age) when administered to lung and renal transplant recipients comparing one Q3 2023
versus two doses and compared to healthy controls (≥50 years of age)
receiving one dose Data anticipated: 2025
NCT05921903
RSV-OA=ADJ-020 (Adults, aged >=50 years of age) III A study on the safety and immune response of investigational RSV OA vaccine in Trial start: Active, not recruiting
combination with herpes zoster vaccine in healthy adults
NCT05966090 Q3 2023
Data anticipated:
H2 2024
Key trials for bepirovirsen:
Trial name (population) Phase Design Timeline Status
B-Well 1 bepirovirsen in nucleos(t)ide treated patients (chronic hepatitis B) III A multi-centre, randomised, double-blind, placebo-controlled trial to confirm Trial Start: Recruiting
the efficacy and safety of treatment with bepirovirsen in participants with
NCT05630807 chronic hepatitis B virus Q1 2023
Data anticipated: 2026+
B-Well 2 bepirovirsen in nucleos(t)ide treated patients (chronic hepatitis B) III A multi-centre, randomised, double-blind, placebo-controlled trial to confirm Trial Start: Recruiting
the efficacy and safety of treatment with bepirovirsen in participants with
chronic hepatitis B virus Q1 2023
NCT05630820
Data anticipated: 2026+
B-Together bepirovirsen sequential combination therapy with Peg-interferon IIb A multi-centre, randomised, open label trial to assess the efficacy and safety Trial start: Complete
(chronic hepatitis B) of sequential treatment with bepirovirsen followed by Pegylated Interferon
Alpha 2a in participants with chronic hepatitis B virus Q1 2021
NCT04676724
Data reported:
Q3 2023
bepirovirsen sequential combination therapy with targeted immunotherapy II A trial on the safety, efficacy and immune response following sequential Trial start: Active, not recruiting
treatment with an anti-sense oligonucleotide against chronic hepatitis B (CHB)
(chronic hepatitis B) and chronic hepatitis B targeted immunotherapy (CHB-TI) in CHB patients Q2 2022
receiving nucleos(t)ide analogue (NA) therapy
NCT05276297 Data anticipated: 2025
gepotidacin (bacterial topoisomerase inhibitor)
Gepotidacin is an investigational bactericidal, first-in-class antibiotic with
a novel mechanism of action for the treatment of uncomplicated urinary tract
infections (uUTI).
Key phase III trials for gepotidacin:
Trial name (population) Phase Design Timeline Status
EAGLE-1 (uncomplicated urogenital gonorrhoea) III A randomised, multi-centre, open-label trial in adolescent and adult Trial start: Complete
participants comparing the efficacy and safety of gepotidacin to ceftriaxone
plus azithromycin in the treatment of uncomplicated urogenital gonorrhoea Q4 2019
caused by Neisseria gonorrhoeae
NCT04010539
Data anticipated:
H1 2024
EAGLE-2 (females with uUTI / acute cystitis) III A randomised, multi-centre, parallel-group, double-blind, double-dummy trial Trial start: Complete; primary endpoint met
in adolescent and adult female participants comparing the efficacy and safety
of gepotidacin to nitrofurantoin in the treatment of uncomplicated urinary Q4 2019
tract infection (acute cystitis)
NCT04020341
Data reported:
Q2 2023
EAGLE-3 (females with uUTI / acute cystitis) III A randomised, multi-centre, parallel-group, double-blind, double-dummy trial Trial start: Complete; primary endpoint met
in adolescent and adult female participants comparing the efficacy and safety
of gepotidacin to nitrofurantoin in the treatment of uncomplicated urinary Q2 2020
tract infection (acute cystitis)
NCT04187144
Data reported:
Q2 2023
MenABCWY vaccine candidate
In September 2023, the phase IIIb MenABCWY 019 trial (NCT04707391) completed.
The randomised, controlled, observer-blind trial evaluated the safety and
immunogenicity of GSK's meningococcal ABCWY (MenABCWY) vaccine candidate when
administered in healthy adolescents and adults, previously primed with
meningococcal ACWY vaccine. MenABCWY vaccine was well tolerated with a
favourable safety profile. The data provide information for the label,
supporting use of MenABCWY in future potential US ACIP recommendations for
adolescent meningococcal vaccination. MenABCWY US file submission is expected
in H1 2024 and data will be published in a peer reviewed journal.
Key trials for MenABCWY vaccine candidate:
Trial name (population) Phase Design Timeline Status
MenABCWY - 019 IIIb A randomised, controlled, observer-blind trial to evaluate safety and Trial start: Complete
immunogenicity of GSK's meningococcal ABCWY vaccine when administered in
healthy adolescents and adults, previously primed with meningococcal ACWY Q1 2021
vaccine
NCT04707391
Data reported:
Q4 2023
MenABCWY - V72 72 III A randomised, controlled, observer-blind trial to demonstrate effectiveness, Trial start: Complete; primary endpoints met
immunogenicity, and safety of GSK's meningococcal Group B and combined ABCWY
vaccines when administered to healthy adolescents and young adults Q3 2020
NCT04502693
Data reported:
Q1 2023
HIV
cabotegravir
GSK continues to advance its early-stage HIV pipeline focused on innovative
long-acting injectable regimens and expects cabotegravir to increasingly
replace dolutegravir as the foundational integrase inhibitor in its portfolio
by the second half of the decade. In 2024, a registrational study for a
ultra-long-acting prevention registration with dosing intervals of four months
is expected to start. Regimen selection for an ultra-long-acting treatment and
the world's first self-administered long- acting regimen for treatment will
also progress. Further data on GSK's current HIV portfolio and early-stage
pipeline will be presented at CROI in Colorado in March 2024.
Respiratory/Immunology
camlipixant (P2X3 receptor antagonist)
The acquisition of Bellus in June 2023 included camlipixant (BLU-5937), an
investigational, highly selective oral P2X3 antagonist currently in
development for first-line treatment of adult patients suffering from
refractory chronic cough (RCC). The CALM phase III development programme to
evaluate the efficacy and safety of camlipixant for use in adults with RCC is
ongoing.
Trial name (population) Phase Design Timeline Status
CALM-1 (refractory chronic cough) III A 52-week, randomised, double-blind, placebo-controlled, parallel-arm efficacy Trial start: Recruiting
and safety trial with open-label extension of camlipixant in adult
participants with refractory chronic cough, including unexplained chronic Q4 2022
cough
NCT05599191
Data anticipated:
2025
CALM-2 (refractory chronic cough) III A 24-week, randomised, double-blind, placebo-controlled, parallel-arm efficacy Trial start: Recruiting
and safety trial with open-label extension of camlipixant in adult
participants with refractory chronic cough, including unexplained chronic Q1 2023
cough
NCT05600777
Data anticipated:
2025
depemokimab (long acting anti-IL5)
Depemokimab is a unique and distinct monoclonal antibody developed
specifically for its affinity for IL-5 and long duration of inhibition. The
phase III programme for depemokimab continues to make progress across a range
of eosinophil-driven diseases with phase III data expected to begin reading
out in H1 2024.
Key phase III trials for depemokimab:
Trial name (population) Phase Design Timeline Status
SWIFT-1 (severe eosinophilic asthma) III A 52-week, randomised, double-blind, placebo-controlled, parallel-group, Trial start: Active, not recruiting
multi-centre trial of the efficacy and safety of depemokimab adjunctive
therapy in adult and adolescent participants with severe uncontrolled asthma Q1 2021
with an eosinophilic phenotype
NCT04719832
Data anticipated:
H1 2024
SWIFT-2 (severe eosinophilic asthma) III A 52-week, randomised, double-blind, placebo-controlled, parallel-group, Trial start: Active, not recruiting
multi-centre trial of the efficacy and safety of depemokimab adjunctive
therapy in adult and adolescent participants with severe uncontrolled asthma Q1 2021
with an eosinophilic phenotype
NCT04718103
Data anticipated:
H1 2024
AGILE (SEA) III A 52-week, open label extension phase of SWIFT-1 and SWIFT-2 to assess the Trial start: Recruiting
long-term safety and efficacy of depemokimab adjunctive therapy in adult and
(extension) adolescent participants with severe uncontrolled asthma with an eosinophilic Q1 2022
phenotype
NCT05243680
Data anticipated:
2025
NIMBLE (SEA) III A 52-week, randomised, double-blind, double-dummy, parallel group, Trial start: Recruiting
multi-centre, non-inferiority trial assessing exacerbation rate, additional
measures of asthma control and safety in adult and adolescent severe asthmatic Q1 2021
participants with an eosinophilic phenotype treated with depemokimab compared
NCT04718389 with mepolizumab or benralizumab
Data anticipated:
2025
ANCHOR-1 (chronic rhinosinusitis with nasal polyps; CRSwNP) III Efficacy and safety of depemokimab in participants with CRSwNP Trial start: Active, not recruiting
Q2 2022
NCT05274750
Data anticipated:
H2 2024
ANCHOR-2 (CRSwNP) III Efficacy and safety of depemokimab in participants with CRSwNP Trial start: Active, not recruiting
Q2 2022
NCT05281523
Data anticipated:
H2 2024
Key phase III trials for depemokimab continued:
Trial name (population) Phase Design Timeline Status
OCEAN (eosinophilic granulomatosis with polyangiitis; EGPA) III Efficacy and safety of depemokimab compared with mepolizumab in adults with Trial start: Recruiting
relapsing or refractory EGPA
Q3 2022
NCT05263934 Data anticipated:
2025
DESTINY (hyper-eosinophilic syndrome; HES) III A 52-week, randomised, placebo-controlled, double-blind, parallel group, Trial start: Recruiting
multicentre trial of depemokimab in adults with uncontrolled HES receiving
standard of care (SoC) therapy Q3 2022
NCT05334368 Data anticipated:
2026+
Nucala (mepolizumab)
In January 2024, GSK announced that the China National Medical Products
Administration has approved Nucala as an add-on maintenance treatment for
severe eosinophilic asthma in adults and adolescents aged 12 years and older.
Nucala is the first anti-Interleukin-5 (IL-5) targeting treatment approved for
use in China for adult and adolescent patients with this condition. Nucala is
currently approved in China for use in adults with eosinophilic granulomatosis
with polyangiitis (EGPA) and was included on the National Reimbursement Drug
List in January 2023.
The MATINEE phase III trial investigating Nucala in patients with chronic
obstructive pulmonary disease (COPD) is expected to readout in the second half
of 2024.
Trial name (population) Phase Design Timeline Status
MATINEE (chronic obstructive pulmonary disease; COPD) III A multicentre randomised, double-blind, parallel-group, placebo-controlled Trial start: Active, not recruiting
trial of mepolizumab 100 mg subcutaneously as add-on treatment in participants
with COPD experiencing frequent exacerbations and characterised by eosinophil Q4 2019
levels
NCT04133909 Data anticipated:
H2 2024
Oncology
Blenrep (belantamab mafodotin)
In November 2023, GSK announced positive headline results from a planned
interim analysis of the DREAMM-7 head-to-head phase III trial evaluating
belantamab mafodotin as a second-line or later treatment for relapsed or
refractory multiple myeloma. The trial met its primary endpoint of
progression-free survival (PFS) and showed that belantamab mafodotin when
combined with bortezomib plus dexamethasone (BorDex) significantly extended
the time to disease progression or death versus daratumumab plus BorDex, an
existing standard of care for relapsed/refractory multiple myeloma. A strong
and clinically meaningful overall survival (OS) trend with nominal p value
< 0.0005 was also observed at the time of this analysis, and the trial
continues to follow up for OS. Results will be shared with health authorities
and presented at a scientific congress.
In December 2023, the Committee for Medicinal Products for Human Use (CHMP) of
the European Medicines Agency (EMA) confirmed its initial negative opinion
recommending against renewal of Blenrep's conditional marketing authorisation
in the EU for its existing fifth line and later monotherapy indication. The
opinion was based on data from the DREAMM-3 and DREAMM-2 clinical trials, as
well as post-marketing data.
The DREAMM (DRiving Excellence in Approaches to Multiple Myeloma) clinical
development programme continues to evaluate the potential of belantamab
mafodotin with data from the ongoing head-to-head phase III DREAMM-8 trial
evaluating belantamab mafodotin in combination with pomalidomide and
dexamethasone versus bortezomib in combination with pomalidomide and
dexamethasone expected in the second half of 2024.
Key phase III trials for Blenrep:
Trial name (population) Phase Design Timeline Status
DREAMM-7 (2L+ multiple myeloma; MM) III A multi-centre, open-label, randomised trial to evaluate the efficacy and Trial start: Active, not recruiting
safety of the combination of belantamab mafodotin, bortezomib, and
dexamethasone (B-Vd) compared with the combination of daratumumab, bortezomib Q2 2020
and dexamethasone (D-Vd) in participants with relapsed/refractory multiple
NCT04246047 myeloma Primary data reported:
Q4 2023
DREAMM-8 (2L+ MM) III A multi-centre, open-label, randomised trial to evaluate the efficacy and Trial start: Enrolment complete
safety of belantamab mafodotin in combination with pomalidomide and
dexamethasone (B-Pd) versus pomalidomide plus bortezomib and dexamethasone Q4 2020
(P-Vd) in participants with relapsed/refractory multiple myeloma
NCT04484623 Data anticipated:
H2 2024
Jemperli (dostarlimab)
In December 2023, the European Commission granted marketing authorisation for
Jemperli in combination with carboplatin-paclitaxel (chemotherapy), for the
treatment of adult patients with mismatch repair deficient
(dMMR)/microsatellite instability-high (MSI-H) primary advanced or recurrent
endometrial cancer and who are candidates for systemic therapy. This is the
first and only frontline immuno-oncology treatment approved in the European
Union for this type of cancer. Additionally, with the authorisation in this
indication, the Commission's conditional approval for Jemperli as a
monotherapy for treating adult patients with dMMR/MSI-H recurrent or advanced
endometrial cancer that has progressed on or following prior treatment with a
platinum-containing regimen was converted to full approval.
Jemperli was also approved by Canada in November and Switzerland in December
in combination with chemotherapy for the treatment of dMMR/MSI-H primary
advanced or recurrent endometrial cancer. The application remains under review
in Australia and Singapore as part of the US FDA's Oncology Center of
Excellence Project Orbis framework, which allows for concurrent submission to
and review by US and other international regulatory authorities.
In December 2023, GSK announced positive headline results from a planned
analysis of Part 2 of the RUBY/ENGOT-EN6/GOG3031/NSGO phase III trial
investigating dostarlimab plus standard-of-care chemotherapy (carboplatin and
paclitaxel), followed by dostarlimab plus Zejula (niraparib) as maintenance
therapy, in adult patients with primary advanced or recurrent endometrial
cancer. The trial, which evaluated this combination against placebo plus
chemotherapy followed by placebo, met its primary endpoint of progression-free
survival, with a statistically significant and clinically meaningful benefit
observed in both the overall patient population and in a subpopulation of
patients with mismatch repair proficient/microsatellite stable (MMRp/MSS)
tumours.
Jemperli is the foundation of our ongoing immuno-oncology-based research and
development programme, and these updates reinforce our approach of building
combination therapies with dostarlimab as the backbone in an effort to improve
patient outcomes and options.
Key trials for Jemperli:
Trial name (population) Phase Design Timeline Status
RUBY III A randomised, double-blind, multi-centre trial of dostarlimab plus Trial start: Active, not recruiting; primary endpoint met in RUBY Part 1
carboplatin-paclitaxel with and without niraparib maintenance versus placebo
ENGOT-EN6 plus carboplatin-paclitaxel in patients with recurrent or primary advanced Q3 2019
endometrial cancer
GOG-3031 (1L stage III or IV endometrial cancer)
Part 1 data reported:
NCT03981796 Q4 2022
Part 2 data reported:
Q4 2023
PERLA (1L metastatic non-small cell lung cancer) II A randomised, double-blind trial to evaluate the efficacy of dostarlimab plus Trial start: Active, not recruiting; primary endpoint met
chemotherapy versus pembrolizumab plus chemotherapy in metastatic non-squamous
non-small cell lung cancer Q4 2020
NCT04581824
Primary data reported:
Q4 2022
GARNET (advanced solid tumours) I/II A multi-centre, open-label, first-in-human trial evaluating dostarlimab in Trial start: Recruiting
participants with advanced solid tumours who have limited available treatment
options Q1 2016
NCT02715284
Primary data reported:
Q1 2019
AZUR-1 (locally advanced rectal cancer) II A single-arm, open-label trial with dostarlimab monotherapy in participants Trial start: Recruiting
with untreated stage II/III dMMR/MSI-H locally advanced rectal cancer
Q1 2023
NCT05723562
Data anticipated: 2026+
AZUR-2 (untreated perioperative T4N0 or stage III colon cancer) III An open-label, randomised trial of perioperative dostarlimab monotherapy Trial start: Recruiting
versus standard of care in participants with untreated T4N0 or stage III
dMMR/MSI-H resectable colon cancer Q2 2023
NCT05855200
Data anticipated: 2026+
COSTAR Lung (advanced non-small cell lung cancer that has progressed on prior II/III A multi-centre, randomised, parallel group treatment, open label trial Trial start: Active, not recruiting
PD-(L)1 therapy and chemotherapy) comparing cobolimab + dostarlimab + docetaxel to dostarlimab + docetaxel to
docetaxel alone in participants with advanced non-small cell lung cancer who Q4 2020
have progressed on prior anti-PD-(L)1 therapy and chemotherapy
NCT04655976
Data anticipated:
H2 2024
Ojjaara (momelotinib)
Following the September 2023 approval of Ojjaara by the US FDA, GSK announced
in January 2024 that the European Commission granted marketing authorisation
for momelotinib under the brand name Omjjara for the treatment of
disease-related splenomegaly (enlarged spleen) or symptoms in adult patients
with moderate to severe anaemia who have primary myelofibrosis, post
polycythaemia vera myelofibrosis or post essential thrombocythaemia
myelofibrosis and who are Janus kinase (JAK) inhibitor naïve or have been
treated with ruxolitinib. Omjjara is the only medicine in the European Union
(EU) indicated for both newly diagnosed and previously treated myelofibrosis
patients with moderate to severe anaemia for treating splenomegaly and
symptoms.
Key phase III trial for momelotinib:
Trial name (population) Phase Design Timeline Status
MOMENTUM (myelofibrosis) III A randomised, double-blind, active control phase III trial intended to confirm Trial start: Complete; primary endpoint met
the differentiated clinical benefits of the investigational drug momelotinib
(MMB) versus danazol (DAN) in symptomatic and anaemic subjects who have Q1 2020
previously received an approved Janus kinase inhibitor (JAKi) therapy for
NCT04173494 myelofibrosis (MF)
Primary data reported:
Q1 2022
Zejula (niraparib)
GSK continues to assess the potential of Zejula across multiple tumour types
and in combination with other agents. The ongoing development programme
includes several combination studies, including the RUBY Part 2 phase III
trial of niraparib and dostarlimab, a programmed death receptor-1
(PD-1)-blocking antibody, in recurrent or primary advanced (stage III or IV)
endometrial cancer, which reported positive headline results in December 2023.
Key phase III trials for Zejula (see also RUBY Part 2 in Jemperli section):
Trial name (population) Phase Design Timeline Status
ZEAL-1L (1L advanced non-small cell lung cancer maintenance ) III A randomised, double-blind, placebo-controlled, multi-centre trial comparing Trial start: Active, not recruiting
niraparib plus pembrolizumab versus placebo plus pembrolizumab as maintenance
therapy in participants whose disease has remained stable or responded to Q4 2020
first-line platinum-based chemotherapy with pembrolizumab for Stage IIIB/IIIC
NCT04475939 or IV non-small cell lung cancer
Data anticipated:
H2 2024
FIRST (1L ovarian cancer maintenance) III A randomised, double-blind, comparison of platinum-based therapy with Trial start: Active, not recruiting
dostarlimab (TSR-042) and niraparib versus standard of care platinum-based
therapy as first-line treatment of stage III or IV non-mucinous epithelial Q4 2018
ovarian cancer
NCT03602859
Data anticipated:
H1 2024
Reporting definitions
Total, Continuing and Adjusted results
Total reported results represent the Group's overall performance including
discontinued operations. Continuing results represents performance excluding
discontinued operations. GSK also uses a number of adjusted, non-IFRS,
measures to report the performance of its business. Adjusted results and other
non-IFRS measures may be considered in addition to, but not as a substitute
for or superior to, information presented in accordance with IFRS. Adjusted
results are defined on page 19 and other non-IFRS measures are defined below
and are based on continuing operations.
Free cash flow from continuing operations
Free cash flow is defined as the net cash inflow/outflow from continuing
operating activities less capital expenditure on property, plant and equipment
and intangible assets, contingent consideration payments, net finance costs,
and dividends paid to non-controlling interests, contributions from
non-controlling interests plus proceeds from the sale of property, plant and
equipment and intangible assets, and dividends received from joint ventures
and associates (all attributable to continuing operations). It is used by
management for planning and reporting purposes and in discussions with and
presentations to investment analysts and rating agencies. Free cash flow
growth is calculated on a reported basis. A reconciliation of net cash inflow
from continuing operations to free cash flow from continuing operations is set
out on page 44.
Free cash flow conversion
Free cash flow conversion is free cash flow from continuing operations as a
percentage of profit attributable to shareholders from continuing operations.
Working capital
Working capital represents inventory and trade receivables less trade
payables.
CER and AER growth
In order to illustrate underlying performance, it is the Group's practice to
discuss its results in terms of constant exchange rate (CER) growth. This
represents growth calculated as if the exchange rates used to determine the
results of overseas companies in Sterling had remained unchanged from those
used in the comparative period. CER% represents growth at constant exchange
rates. £% or AER% represents growth at actual exchange rates.
Total Net debt
Net debt is defined as total borrowings less cash, cash equivalents, liquid
investments, and short-term loans to third parties that are subject to an
insignificant risk of change in value.
Discontinued operations
Consumer Healthcare was presented as a discontinued operation from Q2 2022.
The demerger of Consumer Healthcare was completed on 18 July 2022. The Group
Income Statement and Group Cash Flow Statement distinguish discontinued
operations from continuing operations.
Share Consolidation
Following completion of the Consumer Healthcare business demerger on 18 July
2022, GSK plc Ordinary shares were consolidated to maintain share price
comparability before and after demerger. Shareholders received 4 new Ordinary
shares with a nominal value of 31¼ pence each for every 5 existing Ordinary
shares which had a nominal value of 25 pence each. Earnings per share, diluted
earnings per share, adjusted earnings per share and dividends per share were
retrospectively adjusted to reflect the Share Consolidation in all the periods
presented.
Earnings per share
Earnings per share has been retrospectively adjusted for the Share
Consolidation on 18 July 2022, applying a ratio of 4 new Ordinary shares for
every 5 existing Ordinary shares.
Total Earnings per share
Unless otherwise stated, Total earnings per share refers to Total basic
earnings per share.
Total Operating Margin
Total Operating margin is Total operating profit divided by turnover.
COVID-19 solutions
COVID-19 solutions include the sales of pandemic adjuvant and other COVID-19
solutions including vaccine manufacturing and Xevudy and the associated costs
but does not include reinvestment in R&D. This categorisation is used by
management and we believe is helpful to investors through providing clarity on
the results of the Group by showing the contribution to growth from COVID-19
solutions.
Turnover excluding COVID-19 solutions
Turnover excluding COVID-19 solutions excludes the impact of sales of pandemic
adjuvant within Vaccines and Xevudy within Specialty Medicines related to the
COVID-19 pandemic. Management believes that the exclusion of the impact of
these COVID-19 solutions sales aids comparability in the reporting periods and
understanding of GSK's growth including by region versus prior periods and
also 2024 Guidance which excludes any contributions from COVID-19 solutions.
General Medicines
General Medicines are usually prescribed in the primary care or community
settings by general healthcare practitioners. For GSK, this includes medicines
for inhaled respiratory, dermatology, antibiotics and other diseases.
Specialty Medicines
Specialty Medicines are typically prescription medicines used to treat complex
or rare chronic conditions. For GSK, this comprises medicines for infectious
diseases, HIV, Oncology, Respiratory/Immunology and Other.
Percentage points
Percentage points of growth which is abbreviated to ppts.
Non-controlling interest
Non-controlling interest is the equity in a subsidiary not attributable,
directly or indirectly, to a parent.
RAR (Returns and Rebates)
GSK sells to customers both commercial and government mandated contracts with
reimbursement arrangements that include rebates, chargebacks and a right of
return for certain pharmaceutical products principally in the US. Revenue
recognition reflects gross-to-net sales adjustments as a result. These
adjustments are known as the RAR accruals and are a source of significant
estimation uncertainty and fluctuation which can have a material impact on
reported revenue from one accounting period to the next.
Risk adjusted sales
Pipeline risk-adjusted sales are based on the latest internal estimate of the
probability of technical and regulatory success for each asset in development.
Compound annual growth rate (CAGR)
CAGR is defined as the compound annual growth rate and shows the annualised
average rate for growth in sales and adjusted operating profit between 2021 to
2026, assuming growth takes place at an exponentially compounded rate during
those years.
Brand names and partner acknowledgements: brand names appearing in italics
throughout this document are trademarks of GSK or associated companies or used
under licence by the Group.
Guidance and outlooks, assumptions and cautionary statements
2024 Guidance
GSK expects 2024 sales to increase between 5 to 7 per cent and Adjusted
Operating profit to increase between 7 to 10 per cent. Adjusted Earnings per
share is expected to increase between 6 to 9 per cent. This guidance is
provided at CER and excludes any contribution from COVID-19 related solutions.
The Group has made planning assumptions that we expect sales to increase
between 5 to 7 per cent, with high single digit to low double-digit growth for
Vaccines, low double-digit growth for Specialty Medicines and a
mid-single-digit decline for General Medicines.
2021-26 sales and adjusted operating profit growth outlooks and 2031 sales
outlook
GSK upgrades the outlooks, from those previously given, for the period
2021-2026 and for 2031. For the period 2021-2026, GSK now expects sales to
grow more than 7% on a CAGR basis and adjusting operating profit to increase
more than 11%, on the same basis. This compares to previous outlooks of more
than 5% and more than 10% respectively. Adjusted operating profit margin in
2026 is now expected to be more than 31%.
By 2031, GSK now expects to achieve sales of more than £38 billion on a
risk-adjusted basis and at CER. This is an increase of £5 billion compared to
the estimate given in 2021 and continues to exclude any contributions from
early-stage pipeline assets, anticipated business development and Blenrep. GSK
expects to maintain a continued strong focus on margin improvements, while
retaining flexibility to invest in future growth. Recognising that GSK will
likely face loss of exclusivity for dolutegravir during 2028 to 2030 in US and
EU, with the majority of impact 2029 to 2030, GSK has today stated that it
expects operating margins to be broadly stable through this period. GSK
expects an effective transition within its HIV portfolio towards new
long-acting treatment and prevention therapies, margin mix benefit from growth
in higher operating margin Vaccine and Specialty Medicine products, and a
continued focus on achievable productivity gains, notably in supply chain and
in SG&A.
These outlooks are provided at CER and exclude any contribution from COVID-19
related solutions.
Assumptions and basis of preparation related to 2024 guidance, 2021-26 and
2031 outlooks
In outlining the guidance for 2024 and outlooks for the period 2021-2026 and
for 2031, the Group has made certain assumptions about the macro-economic
environment, the healthcare sector (including regarding existing and possible
additional governmental legislative and regulatory reform), the different
markets and competitive landscape in which the Group operates and the delivery
of revenues and financial benefits from its current portfolio, its development
pipeline and restructuring programmes.
2024 Guidance
These planning assumptions as well as operating profit and earnings per share
guidance and dividend expectations assume no material interruptions to supply
of the Group's products, no material mergers, acquisitions or disposals, no
material litigation or investigation costs for the Company (save for those
that are already recognised or for which provisions have been made) and no
change in the Group's shareholdings in ViiV Healthcare. The assumptions also
assume no material changes in the healthcare environment or unexpected
significant changes in pricing as a result of government or competitor action.
The 2024 guidance factors in all divestments and product exits announced to
date.
2021-26 and 2031 outlooks
The assumptions for GSK's updated revenue, operating profit, operating margin
and cash flow outlooks, 2031 revenue outlook and margin expectations through
dolutegravir loss of exclusivity assume the delivery of revenues and financial
benefits from its current and development pipeline portfolio of drugs and
vaccines (which have been assessed for this purpose on a risk-adjusted basis,
as described further below); regulatory approvals of the pipeline portfolio of
drugs and vaccines that underlie these expectations (which have also been
assessed for this purpose on a risk-adjusted basis, as described further
below); no material interruptions to supply of the Group's products;
successful delivery of the ongoing and planned integration and restructuring
plans; no material mergers, acquisitions or disposals or other material
business development transactions; no material litigation or investigation
costs for the company (save for those that are already recognised or for which
provisions have been made); no share repurchases by the company; and no change
in the shareholdings in ViiV Healthcare. GSK assumes no premature loss of
exclusivity for key products over the period.
The assumptions for GSK's updated revenue, operating profit, operating margin
and cash flow outlooks, 2031 revenue outlook and margin expectations through
dolutegravir loss of exclusivity also factor in all divestments and product
exits announced to date as well as material costs for investment in new
product launches and R&D. Risk-adjusted sales includes sales for potential
planned launches which are risk-adjusted based on the latest internal estimate
of the probability of technical and regulatory success for each asset in
development. Potential future sales contribution from Blenrep has been
excluded.
Notwithstanding these guidance, outlooks and expectations, there is still
uncertainty as to whether our assumptions, guidance, outlooks and expectations
will be achieved, including based on the other assumptions outlined above.
All outlook statements are given on a constant currency basis and use 2023
average exchange rates as a base (£1/$1.24, £1/€1.15, £1/Yen 175).
2021-2026 outlook refers to the 5 years to 2026 with 2021 as the base year.
Assumptions and cautionary statement regarding forward-looking statements
The Group's management believes that the assumptions outlined above are
reasonable, and that the guidance, outlooks, and expectations described in
this report are achievable based on those assumptions. However, given the
forward-looking nature of these guidance, outlooks, and expectations, they are
subject to greater uncertainty, including potential material impacts if the
above assumptions are not realised, and other material impacts related to
foreign exchange fluctuations, macro-economic activity, the impact of
outbreaks, epidemics or pandemics, changes in legislation, regulation,
government actions or intellectual property protection, product development
and approvals, actions by our competitors, and other risks inherent to the
industries in which we operate.
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, dividend payments 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.
All guidance, outlooks and expectations should be read together with the
guidance and outlooks, assumptions and cautionary statements in this Q4 2023
earnings release.
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 2022. 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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