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Highlights
- GSK's Q3 2024 sales reached £8.0 billion, reflecting a 2% decline at actual exchange rates (AER) but a 2% increase at constant exchange rates (CER).
- Specialty Medicines showed robust growth, with sales up 19%, counterbalancing a significant drop in vaccine sales.
- The company confirmed its 2024 guidance, projecting turnover growth of 7% to 9% and core operating profit growth of 11% to 13%.
GlaxoSmithKline (LSE:GSK) has reported promising results for the third quarter of 2024, demonstrating its commitment to achieving the company's projected outlook for the year despite facing challenges in its vaccine segment. Total sales for Q3 reached £8.0 billion, which translates to a 2% decrease at actual exchange rates (AER) but a stable 2% increase at constant exchange rates (CER). This performance reflects the company's ongoing resilience and strategic focus, particularly in its Specialty Medicines division.
The decline in sales from vaccines was significant, with overall vaccine sales dropping by 15%. Notably, sales of the Shingrix vaccine fell by 7%, while Arexvy experienced a dramatic 72% decline. These decreases were attributed to recent changes in the Advisory Committee on Immunization Practices (ACIP) guidelines, a shift towards prioritizing COVID-19 vaccinations in the U.S., and the annualization effects following Arexvy's launch in Q3 2023.
In contrast, GSK's Specialty Medicines portfolio thrived, showcasing a remarkable 19% growth in sales. This segment's success was fueled by a 12% increase in HIV product sales and an impressive 94% surge in oncology sales. Additionally, respiratory/immunology products and other therapies saw a 14% growth, reflecting the effectiveness of GSK's R&D efforts in these critical therapeutic areas. Furthermore, General Medicines experienced a 7% increase in sales, with Trelegy, a key respiratory product, up by 16%.
Despite the challenges, GSK faced a significant operating profit decline of 86% and a total earnings per share (EPS) drop of 100%. This sharp decline was primarily due to a £1.8 billion ($2.3 billion) charge associated with the ongoing Zantac settlement. However, the company reported a 5% increase in core operating profit and core EPS, attributed to the strong performance of Specialty Medicines and effective cost management strategies.
The company generated £2.5 billion in cash from operations during the quarter, resulting in a free cash flow of £1.3 billion. GSK also declared a Q3 2024 dividend of 15 pence, reaffirming its commitment to return value to shareholders. The company maintains its full-year dividend expectation at 60 pence.
Looking ahead, GSK confirmed its guidance for 2024, forecasting turnover growth between 7% and 9%. Core operating profit is expected to grow by 11% to 13%, while core EPS growth is projected at 10% to 12%. The company aims to deliver results broadly around the midpoint of these existing ranges, all of which are calculated at constant exchange rates and exclude COVID-19 solutions.
