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GSK (LSE:GSK) has delivered a strong financial performance for the second quarter of 2024, demonstrating substantial growth across its portfolio. The company achieved total sales of £7.9 billion, marking a 13% increase compared to the previous year. This broad-based performance underscores GSK’s effective strategy and market position.
Segment Performance
- Vaccines: Sales for GSK’s vaccines segment grew by 1%, or 3% excluding COVID-related products. However, Shingrix, a key vaccine, saw a 4% decline in sales, totaling £0.8 billion.
- Specialty Medicines: This segment saw significant growth of 22%. HIV sales increased by 13%, while oncology sales more than doubled to £0.4 billion. This robust performance highlights GSK’s expanding footprint in critical therapeutic areas.
- General Medicines: Sales in this category rose by 12%, with Trelegy, a prominent product, experiencing a notable 41% increase to £0.8 billion.
Profit and Earnings
Despite strong sales, GSK reported a decrease in total operating profit by 22% and total EPS (earnings per share) by 27% for Q2 2024. These declines were primarily attributed to higher charges related to CCL remeasurements, which were influenced by improved long-term HIV prospects and fluctuations in foreign currency.
Conversely, the core operating profit rose by 18%, with a further positive impact of 3% excluding COVID-related factors. Core EPS increased by 13%, with an additional 4% impact excluding COVID. These results reflect the company’s continued leverage from strong sales and a favorable product and regional mix, although they were partly offset by increased investment in R&D and growth assets, along with lower royalty income.
Cash Flow and Dividend
GSK generated £1.7 billion in cash from operations during the quarter, with free cash flow amounting to £0.3 billion. The company declared a Q2 2024 dividend of 15p per share and has maintained its expectation for a full-year dividend of 60p per share.
Upgraded 2024 Guidance
In light of its strong performance, GSK has revised its 2024 guidance upwards:
- Turnover Growth: Expected to be 7% to 9%, an increase from the previous forecast of 5% to 7%.
- Core Operating Profit Growth: Revised to 11% to 13% from the earlier 9% to 11%.
- Core EPS Growth: Expected to be 10% to 12%, up from the previous range of 8% to 10%.
GSK’s Q2 2024 results highlight its solid operational performance and strategic focus across various segments. The company’s ability to achieve significant sales growth, particularly in specialty and general medicines, coupled with an improved core profit and EPS, reflects its successful execution of business strategies.
