GSK plc (LON:GSK) has announced its latest trading update.
| Strong sales and Core EPS growth reflecting accelerating momentum in Specialty Medicines offsetting lower Vaccine sales | |
| • | Total 2024 sales £31.4 billion +3% AER; +7% CER |
| • | Specialty Medicines sales +19%. HIV sales +13%. Oncology +98%. Respiratory/Immunology and Other +13% |
| • | Vaccines sales -4%. Shingrix +1% and Arexvy -51% |
| • | General Medicines sales +6%. Trelegy +27% |
| • | Total operating profit -33% and Total EPS -40% largely driven by £1.8 billion ($2.3 billion) charge relating to settlement of Zantac litigation |
| • | Core operating profit +11% (with further positive impact of +2% ex COVID) and Core EPS +10% (with further positive impact of +2% ex COVID) reflecting strong Specialty Medicines performance and disciplined increased investment in progressing the R&D portfolio |
| • | Cash generated from operations in the year of £8 billion with Free cash flow of £3 billion |
| (Financial Performance – 2024 results unless otherwise stated, growth % and commentary at CER as defined on page 50). | |
| 2024 | Q4 2024 | ||||||||||
| £m | % AER | % CER | £m | % AER | % CER | ||||||
| Turnover | 31,376 | 3 | 7 | 8,117 | 1 | 4 | |||||
| Turnover ex COVID | 31,364 | 4 | 8 | 8,106 | 1 | 4 | |||||
| Total operating profit | 4,021 | (40) | (33) | 696 | 21 | 54 | |||||
| Total operating margin % | 12.8% | (9.4ppts) | (8.3ppts) | 8.6% | 1.5ppts | 3.4ppts | |||||
| Total EPS | 63.2p | (48) | (40) | 10.1p | 18 | 60 | |||||
| Core operating profit | 9,148 | 4 | 11 | 1,431 | (18) | (10) | |||||
| Core operating margin % | 29.2% | 0.2ppts | 0.9ppts | 17.6% | (4.1ppts) | (2.9ppts) | |||||
| Core EPS | 159.3p | 3 | 10 | 23.2p | (20) | (10) | |||||
| Cash generated from operations | 7,861 | (3) | 2,586 | (30) | |||||||
| Further progress in R&D with growth prospects strengthened in all key therapeutic areas: | |
| • | 71 Specialty Medicines and Vaccines now in clinical development, including 19 in phase III/registration |
| • | Excellent pipeline progress in 2024 with 13 positive phase III readouts across Respiratory, Immunology & Inflammation; Oncology; HIV and Infectious Diseases |
| • | Continued targeted business development to support future growth: proposed acquisition of IDRx, Inc. (GI cancers); acquisition of Aiolos Bio (asthma) and new research alliance with Flagship Pioneering (Respiratory, Immunology & Inflammation), plus strengthened platform capabilities through acquisition of Elsie Biotechnologies (oligonucleotides) |
| • | 5 major new product approvals expected in 2025 including: Blenrep (multiple myeloma) and depemokimab (severe asthma and CRSwNP(1)); plus phase III readouts: camlipixant (refractory chronic cough) and tebipenem (complicated UTI); and important pipeline catalysts: Respiratory (depemokimab COPD); Oncology (B7-H3 & B7-H4 ADCs); HIV (ULA Q4/Q6M) |
| Increased returns to shareholders | |
| • | Q4 2024 dividend of 16p declared; 61p FY 2024; 64p expected for 2025 |
| • | £2 billion share buyback programme to be implemented over the next 18 months |
| 2025 guidance and further improvement to long-term outlooks | |
| • | Expect 2025 turnover growth of between 3% to 5%; Core operating profit growth of between 6% to 8%; Core EPS growth of between 6% to 8%, including the expected benefit from the share buyback programme |
| • | 2031 sales outlook increased to more than £40 billion (previously >£38 billion), reflecting late-stage pipeline progress |
Guidance all at CER
Emma Walmsley, Chief Executive Officer, GSK: “GSK delivered another year of excellent performance in 2024, with strong sales and core profit growth driven by accelerating momentum of our specialty medicines portfolio. This, together with outstanding phase III pipeline progress, means we expect another year of profitable growth in 2025, and have further improved our long-term outlook, with sales of more than £40 billion now expected by 2031. In particular, we are increasing and prioritising R&D investment to promising new long-acting and specialty medicines in Respiratory, Immunology & Inflammation, Oncology and HIV. Our outperformance and stronger balance sheet support these investments and others planned in R&D, as well as the opportunity to enhance shareholder returns through our progressive dividend and the share buyback programme which we have set out today.”
The Total results are presented in summary above and on page 7 and Core results reconciliations are presented on pages 19, 20, 22 and 23. Core results are a non-IFRS measure that may be considered in addition to, but not as a substitute for, or superior to, information presented in accordance with IFRS. The following terms are defined on pages 50-51: Core results, £% or AER% growth, CER% growth, COVID-19 solutions, turnover excluding COVID-19 solutions; and other non-IFRS measures. GSK provides guidance on a Core results basis only, for the reasons set out on page 17. ll expectations, guidance and targets regarding future performance and dividend payments should be read together with ‘Guidance and outlooks, assumptions and cautionary statements’ on page 52. (1) CRSwNP – Chronic rhinosinusitis with nasal polyps.
2025 Guidance
GSK provides its full-year guidance at constant exchange rates (CER).
| Turnover is expected to increase between 3 to 5 per cent |
| Core operating profit is expected to increase between 6 to 8 per cent |
| Core earnings per share is expected to increase between 6 to 8 per cent |
This guidance is supported by the following turnover expectations for full-year 2025 at CER
| Specialty Medicines | – | expected increase of a low double-digit per cent in turnover |
| Vaccines | – | expected decrease of a low single-digit per cent in turnover |
| General Medicines | – | expected to be broadly stable for turnover |
Core operating profit is expected to grow between 6 to 8 per cent at CER. GSK expects to deliver leverage at a gross margin level due to improved product mix from Specialty Medicines growth and continued operational efficiencies. In addition, GSK anticipates further leverage in Operating profit as we continue to take a returns-based approach to SG&A investments. R&D is expected to increase broadly in line with sales as we invest for future growth.
Core earnings per share is expected to increase between 6 to 8 per cent at CER, in line with Core operating profit growth, reflecting higher interest charges and the tax rate which is expected to rise to around 17.5%, offset by the expected benefit of up to 1% from the share buyback programme. Expectations for non-controlling interests remain unchanged relative to 2024.
Dividend policy
The Dividend policy and the expected pay-out ratio remain unchanged. Consistent with this, and reflecting strong business performance during the quarter, GSK has declared a dividend for Q4 2024 of 16p per share and 61p per share for the full year 2024. GSK’s future dividend policy and guidance regarding the expected dividend pay-out in 2025 are provided on page 36.
GSK now intends to commence a £2 billion share buyback programme, to be implemented over the next 18 months.
COVID-19 solutions
For the full year 2025, GSK does not anticipate any further COVID-19 pandemic-related sales or operating profit. For the full year 2024, and in comparison to 2023, the full year growth in Sales and Core operating profit was adversely impacted by one and two percentage points, respectively.
2021-2026 and 2031 Outlooks
By 2031, GSK now expects to achieve sales of more than £40 billion (previously >£38 billion) on a risk-adjusted basis and at CER. This further increase reflects the inclusion of Blenrep, the significant phase III progress since last year and multiple launch opportunities in the 2025 to 2031 period.
As before, we have further upside potential from our early-stage pipeline and prospective business development.
There is no change to our Group outlooks for 2021-2026. GSK continues to expect sales to grow more than 7% on a CAGR basis and Core operating profit to increase more than 11%, on the same basis. Core operating profit margin in 2026 continues to be expected to be more than 31%.
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 52.
These outlooks are provided at CER and exclude any contribution from COVID-19 related solutions.
Exchange rates
If exchange rates were to hold at the closing rates on 29 January 2025 ($1.24/£1, €1.19/£1 and Yen 193/£1) for the rest of 2025, the estimated impact on 2025 Sterling turnover growth for GSK would be +1% and if exchange gains or losses were recognised at the same level as in 2024, the estimated impact on 2025 Sterling Core Operating Profit growth for GSK would be +2%.
Results presentation
A conference call and webcast for investors and analysts of the quarterly results will be hosted by Emma Walmsley, CEO, at 10.45 am GMT (US EST at 05.45 am) on 5 February 2025. 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.
