GSK delivers Q1 sales of £7.2 billion, -2% AER, +4% CER

Issued: London UK

Total EPS 11.2p, -48% AER, -33% CER; Adjusted EPS 24.6p, -2% AER, +11% CER
Significant currency impact in the quarter reflecting movements in Sterling

GSK Q1 2018 infographic

Full results announcement (PDF)

Download the Q1 2018 results announcement

Q1 2018 results announcement (PDF, 1.3MB)

Financial highlights

  • CER sales growth across all 3 businesses. Pharmaceuticals sales £4.0 billion -4% AER, +2% CER; Vaccines £1.2 billion +7% AER, +13% CER; Consumer Healthcare £2.0 billion -3% AER, +2% CER
  • Adjusted Group operating margin of 26.6%, down 0.2 percentage points AER, up 1.3 percentage points CER. Pharmaceuticals 33.2%; Vaccines 27.4%; Consumer Healthcare 19.4%
  • Total EPS 11.2p, -48% AER, -33% CER, reflecting revaluation of Consumer Healthcare business following agreement to acquire full ownership
  • Adjusted EPS 24.6p, -2% AER, +11% CER driven by continued operating and financial efficiencies
  • Q1 free cash flow £324 million -50% primarily reflecting impact of £317 million Vaccine sales milestone payment to Novartis
  • 19p dividend declared for quarter. Continue to expect 80p for FY 2018
  • Guidance for CER growth in Adjusted EPS for 2018 maintained

Novartis transaction

  • Agreement reached with Novartis to acquire full ownership of Consumer Healthcare business for $13 billion, subject to shareholder approval

Product and pipeline highlights  

  • Sales of Ellipta Respiratory products, £386 million +25% AER, +34% CER and Nucala £104 million +76% AER, +86% CER. Landmark IMPACT data for Trelegy Ellipta published in NEJM. sNDA approved in US and data submitted to European Medicines Agency to support expanded label. OSMO study demonstrating Nucala improves asthma control in severe eosinophilic asthma patients uncontrolled on Xolair presented at AAAAI
  • Continued growth from dolutegravir-based HIV products, including new 2 drug regimen Juluca, with sales of £964 million +15% AER, +23% CER. Positive CHMP opinion received for Juluca in Europe
  • Shingrix sales of £110 million; approved in Europe and Japan (23 March)
GSK Q1 2018 infographic

Emma Walmsley, Chief Executive Officer, GSK said:

“GSK has continued to make good progress in the first quarter with sales growth on a CER basis across all three businesses. We are strongly focused on commercial execution with encouraging starts for our most recent new product launches, Shingrix, Trelegy and Juluca. This performance combined with continued cost discipline has driven a further improvement in the Group’s Adjusted operating margin at CER. We also agreed to acquire full ownership of the Consumer Healthcare business during the quarter, delivering on one of our key capital allocation priorities. This will help improve future cash generation and support capital planning for the Group’s main priority to strengthen the Pharmaceuticals business and R&D pipeline.”

The Total results are presented under ‘Income Statement’ on page 24 and Adjusted results reconciliations are presented on pages 11, and 39 to 40. The definitions of £% or AER% growth, CER% growth, Adjusted results, free cash flow and other non-IFRS measures are set out on page 21. All expectations and targets regarding future performance should be read together with “Assumptions related to 2018 guidance and 2016-2020 outlook” and “Assumptions and cautionary statement regarding forward-looking statements” on page 22.

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