GSK  in a strong position to deliver growth from 2026 onwards


GSK plc (LON:GSK) has delivered strong 2022 performance with full year sales of £29.3 billion +19% AER, +13% CER; Total EPS 371.4p >100% Adjusted EPS of 139.7p +27% AER, +15% CER from continuing operations.


Step change in commercial execution drives strong sales growth across Specialty Medicines and Vaccines

· Sales of £29.3 billion +19% AER, +13% CER. Sales +15% AER, +10% CER excluding COVID-19 solutions

· Specialty Medicines £11.3 billion +37% AER, +29% CER; HIV +20% AER, +12% CER; Oncology +23% AER, +17% CER; Immuno-inflammation and other specialty +29% AER +20% CER; COVID-19 solutions (Xevudy) sales £2.3 billion

· Vaccines £7.9 billion +17% AER, +11% CER; Shingrix £3 billion +72% AER, +60% CER

· General Medicines £10.1 billion +5% AER, +1% CER

Prioritised investment and cost discipline support strong growth in operating profit and EPS

· Total continuing operating margin 21.9%. Total EPS 371.4p > 100% primarily reflecting the gain from discontinued operations arising on the demerger of the Consumer Healthcare business. Total continuing EPS 110.8p +34% AER, +18% CER

· Adjusted operating margin 27.8%. Adjusted operating profit growth +26% AER, +14% CER. This included a decline in growth from COVID-19 solutions of approximately 3% AER and CER

· Adjusted EPS 139.7p +27% AER, +15% CER. This included a decline in growth from COVID-19 solutions of approximately 4% AER, 3% CER

· Full-year 2022 cash generated from operations attributable to continuing operations £7.9 billion. Full-year free cash flow £3.3 billion

R&D delivery and business development supports future growth

· Innovative pipeline of 69 vaccines and specialty medicines based on science of the immune system, with 18 in phase III/registration

· Potential best in class RSV older adults candidate vaccine filed in US, EU, Japan; Shingrix interim 10-year data presented at ID Week 2022; acquisition of Affinivax completed, including phase II next-generation vaccine for pneumococcal disease and use of innovative MAPs technology

· Continued progress in development of long-acting HIV treatments; positive phase II data on N6LS broadly-neutralising antibody presented at HIV Glasgow

· Pivotal phase III trials for gepotidacin antibiotic for uncomplicated UTIs stopped early for efficacy; positive phase IIb data for bepirovirsen, potential functional cure for chronic hepatitis B; exclusive licence agreement with Spero Therapeutics for tebipenem Hbr, late-stage antibiotic for complicated UTIs

· Expansion of depemokimab phase III programme with trials for long-acting IL-5 inhibitor in three additional eosinophil-driven diseases

· 4 approvals anticipated in 2023: RSV OA vaccine (US, EU, JP); Jemperli in 1L endometrial cancer (US); momelotinib in myelofibrosis (US) and daprodustat in chronic kidney disease (US, EU)

Confident in outlooks for turnover and Adjusted operating profit growth

· 2023 Turnover expected to increase between 6% to 8%; Adjusted operating profit expected to increase between 10% to 12%; EPS expected to increase between 12% to 15%

· 2023 Guidance at CER and excludes any contribution from COVID-19 solutions

· 13.75p dividend declared for the Q4 2022. No change to expected dividend from GSK of 56.5p/share for 2023

Emma Walmsley, Chief Executive Officer, GSK:

“2022 was a landmark year for GSK delivering the step change in performance we committed to, driven by strong growth in specialty medicines and vaccines, including record sales for Shingrix. We enter 2023 with good momentum, underpinning confidence in our ambitious sales and profit outlooks for 2026. At the same time, we continue to build a stronger portfolio and pipeline based on infectious diseases and the science of the immune system, including our potential new RSV vaccine. This momentum, together with further targeted business development, means GSK will also be in a strong position to deliver growth from 2026 onwards.”

The Total results are presented in summary on page 2 and under ‘Financial performance’ on pages 9 and 22 and Adjusted results reconciliations are presented on pages 18, 19, 31 and 32. 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 39 and £% or AER% growth, CER% growth, free cash flow and other non-IFRS measures are defined on page 67, COVID-19 solutions are also defined on page 67. GSK provides guidance on an Adjusted results basis only, for the reasons set out on page 39. All expectations, guidance and targets regarding future performance and dividend payments should be read together with ‘Guidance, assumptions and cautionary statements’ on pages 68 and 69.

2023 guidance

The company provides its full-year 2023 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 6 to 8 per cent

Adjusted operating profit is expected to increase between 10 to 12 per cent

Adjusted earnings per share is expected to increase between 12 to 15 per cent

Due to the phasing of quarterly results in 2022 and the resulting comparators, GSK expects turnover and Adjusted operating profit growth to be slightly lower in the first half of 2023 including a challenging comparator in Q1 2022 and somewhat higher in the second half, relative to full-year expectations.

Despite the recovery of healthcare systems, uncertain economic conditions prevail across many markets in which GSK operates and we continue to expect to see variability in performance between quarters.

This guidance is supported by the following turnover expectations for full year 2023 at CER:

Specialty Medicines – Expected increase of mid to high single-digit per cent in turnover

Vaccines – Expected increase of mid-teens per cent in turnover

General Medicines – Expected slight decrease in turnover

Adjusted Operating profit is expected to grow between 10 to 12 per cent at CER reflecting Cost of sales and R&D increasing at a rate slightly below turnover, while SG&A is anticipated to increase at a rate broadly aligned to turnover, reflecting targeted support for launches and potential launches including the RSV older adult candidate vaccine. Adjusted earnings per share is expected to increase between 12 to 15 per cent at CER reflecting favourable net finance costs and non-controlling interests plus an expected lower tax rate, at around 15%.

Additional commentary

Dividend policies and expected pay-out ratios remain unchanged for GSK. The future dividend policies and guidance regarding the expected dividend pay-out in 2023 for GSK are provided on page 37.

COVID-19 solutions

Based on known binding agreements with governments, GSK does not anticipate any significant COVID-19 pandemic-related sales or operating profit in 2023. Sales of COVID-19 solutions were £2.4 billion in 2022 and therefore we expect a reduction in Turnover growth by approximately 9% and a reduction in Adjusted Operating profit growth by 6% to 7%. However, the Company continues to discuss future opportunities to support governments, healthcare systems, and patients whereby its COVID-19 solutions can address the emergence of any new COVID-19 variant of concern.

All expectations, guidance and targets regarding future performance and dividend payments should be read together with ‘Guidance, assumptions and cautionary statements’ on pages 68 and 69. If exchange rates were to hold at the closing rates on 27 January 2023 ($1.24/£1, €1.14/£1 and Yen 161/£1) for the rest of 2023, the estimated impact on 2023 Sterling turnover growth for GSK would be stable and if exchange gains or losses were recognised at the same level as in 2022, the estimated impact on 2023 Sterling Adjusted Operating Profit growth for GSK would also be stable.

Demerger of Consumer Healthcare

On 18 July 2022, GSK plc separated its Consumer Healthcare business from the GSK Group to form Haleon, an independent listed company. The separation was effected by way of a demerger of 80.1% of GSK’s 68% holding in the Consumer Healthcare business to GSK shareholders. Following the demerger, 54.5% of Haleon was held in aggregate by GSK Shareholders, 6.0% remains held by GSK (including shares received by GSK’s consolidated ESOP trusts) and 7.5% remains held by certain Scottish Limited Partnerships (SLPs) set up to provide collateral for a funding mechanism pursuant to which GSK will provide additional funding for its UK defined benefit Pension Schemes. The aggregate ownership by GSK (including ownership by the ESOP trusts and SLPs) after the demerger of 13.5% is measured at fair value with changes through profit and loss.

The gain on the demerger for the distributed stake was £7.7 billion which was recognised in the full-year. The asset distributed was the 54.5% ownership of the Consumer Healthcare business. The net assets derecognised reflected Consumer Healthcare transactions up to 18 July 2022 which included pre-separation dividends declared and settled before 18 July 2022. Those dividends included: £10.4 billion (£7.1 billion attributable to GSK) of dividends funded by Consumer Healthcare debt that was partially on-lent during Q1 2022 and dividends of £0.6 billion (£0.4 billion attributable to GSK) from available cash balances. GSK’s share of the pre-separation dividends funded by debt resulted in a reduction of net debt for GSK on demerger. The gain on the demerger arising from remeasurement of the retained stake was £2.4 billion which was recognised in the full-year.

The total gain on the demerger of the Consumer Healthcare business for the full-year was £10.1 billion. In addition, the Profit after taxation from discontinued operations for the Consumer Healthcare business from 1 January to 18 July 2022 was £0.6 billion which increased the Total profit after tax of discontinued operations in the full-year to £10.7 billion. Following finalisation of the demerger accounting, an adjustment of £0.5 billion to increase the gain on the demerger of Consumer Healthcare as disclosed in Q3 2022 from £9.6 billion to £10.1 billion for the full-year has been recorded retrospectively within the Q3 2022 results. See page 55 for further details on the demerger of Consumer Healthcare.

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 on 1 February 2023. Presentation materials will be published on prior to the webcast and a transcript of the webcast will be published subsequently.

Information available on GSK’s website does not form part of, and is not incorporated by reference into, this Results Announcement.

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