For the month of May 2024

 

Commission File Number 001-15170

 

 

(Translation of registrant's name into English)

 

 

(Address of principal executive office)

 

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F . . . .X. . . . Form 40-F . . . . . . . .

 

 

GSK makes a strong start to 2024 with improving outlook for the year
Broad-based performance drives sales, profits and earnings growth:
●	Total Q1 2024 sales £7.4 billion +10% and +13% ex COVID
●	Vaccines sales +16%, +22% ex COVID. Shingrix £0.9 billion +18%, Arexvy £0.2 billion
●	Specialty Medicines sales +17%, +19% ex COVID with HIV +14%
●	General Medicines sales +1%. Trelegy £0.6 billion +33%
●	Total operating profit and Total EPS for Q1 2024 reflected higher charges for CCL(2) remeasurement, partly offset by strong Core(1) growth
●	Core operating profit +27% (with further positive impact of +8% ex COVID) and Core EPS +28% (with further positive impact of +9% ex COVID). This reflected strong sales and SG&A leverage, partly offset by increased investment in R&D and lower royalty income
●	Cash generated from operations exceeded £1 billion with free cash flow of £0.3 billion
(Financial Performance – Q1 2024 results unless otherwise stated, growth % and commentary at CER, ex COVID is excluding COVID-19 solutions as defined on page 47).

 

	Q1 2024
	£m		% AER		% CER
Turnover	7,363		6		10
Turnover ex COVID	7,362		8		13
Total operating profit	1,490		(28)		(18)
Total operating margin %	20.2%		(9.7ppts)		(7.8ppts)
Total EPS	25.7p		(30)		(19)
Core operating profit	2,443		17		27
Core operating margin %	33.2%		3.1ppts		4.6ppts
Core EPS	43.1p		16		28
Cash generated from operations	1,126		>100

 

R&D delivery and targeted business development supports future growth:
●	Strong pipeline progress with positive phase III read outs for gepotidacin in uncomplicated urogenital gonorrhoea, Cabenuva in HIV treatment, Jemperli in endometrial cancer, and Blenrep in multiple myeloma
●	Innovative Vaccine portfolio further strengthened with regulatory submission acceptances for Arexvy for prevention of RSV in adults 50-59 (US), new meningococcal ABCWY vaccine candidate (US), and Shingrix for prevention of shingles in at-risk adults >18 (China)
●	US FDA Fast Track designation received for bepirovirsen in chronic hepatitis B
●	New positive data for CAB-ULA as ultra long-acting treatment for HIV supports progression and transition of HIV portfolio for long-term growth
●	US FDA regulatory submission accepted for priority review for Jemperli to treat endometrial cancer in broader patient populations
●	Acquisition of Aiolos Bio completed, expanding respiratory biologics pipeline with AIO-001, a potentially best-in-class long-acting TSLP monoclonal antibody for treatment of asthma
2024 guidance updated and dividends:
●	Now expect 2024 turnover growth towards the upper part of 5% to 7% range; Core operating profit growth of 9% to 11% (previously 7% to 10%); Core EPS growth of 8% to 10% (previously 6% to 9%)
●	Dividend declared of 15p for Q1 2024; 60p expected for Full Year 2024

 

Guidance all at CER and excluding COVID-19 solutions

Emma Walmsley, Chief Executive Officer, GSK: “We have made a strong start to 2024, with another quarter of excellent performance and continued pipeline progress, including positive data read outs for 4 phase III medicines. These, together with other R&D achievements, mean we have strengthened prospects for growth in all of our key therapeutic areas this quarter: infectious diseases, HIV, respiratory/immunology and oncology. We expect this strong momentum to continue, and look forward to delivering another year of meaningful growth in sales and earnings in 2024.”

 

The Total results are presented in summary above and on page 8 and Core results reconciliations are presented on pages 20 and 21. (1) GSK has made an update to its reporting framework in Q1 2024 which is to change the description of Adjusted results to Core results to align with European peers in the pharmaceutical industry but with no change to the basis or figures. 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 page 47: 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 18. All expectations, guidance and targets regarding future performance and dividend payments should be read together with ‘Guidance and outlooks, assumptions and cautionary statements’ on page 49. (2) Contingent consideration liability is abbreviated to CCL.

 

 

2024 Guidance

 

GSK provides its full-year guidance at constant exchange rates (CER). All expectations and full-year growth rates exclude any contributions from COVID-19 solutions.

 

GSK has started 2024 strongly, with business momentum across all product areas, particularly in Vaccines and Specialty Medicines, including sales contributions from newly launched vaccines and medicines Arexvy and Ojjaara respectively. General Medicines, particularly Trelegy, also performed better than expected. Along with a favourable product mix, GSK benefitted in the quarter from a successful Zejula royalty dispute appeal, and we also expect royalty income to be slightly higher for the full year. As a result, GSK has upgraded its full-year 2024 guidance.

 

All Guidance excludes the contributions of COVID-19 solutions	Current 2024 guidance at CER	Previous 2024 guidance at CER
Turnover	Increase towards the upper part of the range of between 5% to 7%	Increase between 5% to 7%
Core operating profit	Increase between 9% to 11%	Increase between 7% to 10%
Core earnings per share	Increase between 8% to 10%	Increase between 6% to 9%

 

GSK expects first half 2024 sales growth to be higher than second half 2024 due to the comparator to H2 2023, which benefitted from newly launched vaccines and medicines. In particular, second half 2024, compared to the same period in the prior year, is expected to be influenced by the 2023 launch dynamics and initial channel inventory build attributable to Arexvy. In addition, we expect the majority of Shingrix sales in China in to be in the first half 2024.

 

This guidance continues to be supported by the following turnover expectations for full-year 2024 at CER:

 

All turnover expectations exclude the contributions of COVID-19 solutions	No change to current 2024 expectations at CER
Vaccines	Increase of high single-digit to low double-digit per cent in turnover
Specialty Medicines	Increase of low double-digit per cent in turnover
General Medicines	Decrease of mid-single-digit per cent in turnover

Core Operating profit is expected to grow between 9 to 11 per cent at CER (previously 7 to 10 per cent increase), despite a 6 percentage point impact to Operating Profit growth following the loss of the majority of Gardasil royalties effective from the beginning of 2024. GSK continues to expect to deliver leverage at a gross margin level due to improved product mix from Vaccines and Specialty Medicines growth and continued operational efficiencies. In addition, GSK continues to anticipate further leverage in Operating Profit due to a step down in SG&A growth to a low single-digit increase. R&D continues to be expected to increase broadly in line with sales to support growth of the pipeline.

 

Core Earnings per share is now expected to increase between 8 to 10 per cent at CER, reflecting higher operating profit and more favourable net finance costs. Expectations for non-controlling interests remain unchanged relative to 2023, and GSK continues to anticipate an increase in the Core effective tax rate to around 17% following implementation of a global minimum corporate income tax rate aligned with the Organisation for Economic Co-Operation and Development ‘Pillar 2’ initiative.

In January 2024 GSK set out improved outlooks for the period 2021-2026 and for 2031. Please see 2023 Full year and fourth quarter results on gsk.com.

 

 

 

The Dividend policy and the expected pay-out ratio remain unchanged. Consistent with this, and reflecting strong business performance during the quarter, GSK expects to declare a dividend for Q1 2024 of 15p per share and for the full year 2024 60p.

 

For the full year 2024, GSK does not anticipate any further COVID-19 pandemic-related sales or operating profit. Consequently, and in comparison to 2023, it is anticipated that the full year growth in sales and Core operating profit will be adversely impacted by one and two percentage points, respectively.

 

If exchange rates were to hold at the closing rates on 31 March 2024 ($ 1.26/£1, € 1.17/£1 and Yen 191/£1) for the rest of 2024, the estimated impact on 2024 Sterling turnover growth for GSK would be -3% and if exchange gains or losses were recognised at the same level as in 2023, the estimated impact on 2024 Sterling Core Operating Profit growth for GSK would be -5%.

  

A conference call and webcast for investors and analysts of the quarterly results will be hosted by Emma Walmsley, CEO, at 12 noon BST (US EST at 7am) on 1 May 2024. 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.

 

Performance: turnover
Turnover	Q1 2024
	£m		Growth AER%		Growth CER%
Shingles	945		13		18
Meningitis	299		7		11
RSV (Arexvy)	182		–		–
Influenza	13		8		8
Established Vaccines	838		3		7
Vaccines ex COVID	2,277		17		22
Pandemic vaccines	–		>(100)		>(100)
Vaccines	2,277		12		16
HIV	1,613		10		14
Respiratory/Immunology and Other	635		6		11
Oncology	273		>100		>100
Specialty Medicines ex COVID	2,521		14		19
Xevudy	1		(97)		(97)
Specialty Medicines	2,522		13		17
Respiratory	1,725		(2)		2
Other General Medicines	839		(7)		(2)
General Medicines	2,564		(4)		1
Total	7,363		6		10
Total ex COVID	7,362		8		13
By Region:
US	3,589		10		14
Europe	1,621		(5)		(3)
International	2,153		9		16
Total	7,363		6		10
Turnover ex COVID is excluding COVID-19 solutions during the years from 2020 to 2023 and is a non-IFRS measure defined on page 47 with the reconciliation to the IFRS measure Turnover included in the table above. Financial Performance – Q1 2024 results unless otherwise stated, growth % and commentary at CER.

 

 

		Q1 2024
		£m	AER	CER
Vaccines	Total	2,277	12%	16%
	Excluding COVID	2,277	17%	22%

In Q1 2024, Vaccine sales increased by double-digits, reflecting US demand for Arexvy and strong market growth for Shingrix in International and European markets. However, the quarter's growth was adversely impacted by six percentage points due to COVID-19 solution sales compared to Q1 2023.

 

Shingles	945	13%	18%

The sales of Shingrix, a vaccine against herpes zoster (shingles), increased in the quarter due to strong demand following public funding expansion in International and European markets, with new national immunisation programmes in Australia and Europe, including the UK, together with earlier than anticipated supply to Zhifei (Chongqing Zhifei Biological Products, Ltd), GSK’s co-promotion partner in China. Markets outside the US now represent more than 50% of global sales (Q1 2023: 40%), with Shingrix launched in 39 countries. The majority of these markets have average cumulative immunisation rates below 5%.

 

In Q1 2024, US sales decreased by 7% at AER and 4% at CER, reflecting the comparison to Q1 2023, which benefitted from the removal of adult vaccine cost-sharing covered under Medicare Part D and expanded coverage of adult vaccines under Medicare following the implementation of the Inflation Reduction Act. In addition, the performance reflected the prioritisation of other adult vaccines for example, influenza and COVID-19 during the viral respiratory season and the increasing challenge of activating harder to reach consumers. The US cumulative immunisation penetration rate at the end of 2023 reached 37% of the more than 120 million US adults(1) currently recommended to receive Shingrix, up seven percentage points since the end of 2022. The US performance in Q1 2024 was partly offset by favourable pricing and prior period channel inventory movements.

 

(1)	United States Census Bureau, International Database, Year 2023.

 

	Q1 2024
	£m	AER	CER
Meningitis	299	7%	11%

In Q1 2024, meningitis vaccine sales increased following higher demand in International markets for Menveo, a vaccine against meningitis ACWY. Sales for Bexsero, a vaccine against meningitis B, were stable at AER and increased by 3% at CER in the quarter, primarily reflecting increased demand in Australian regional immunisation programmes and the recent launch in Vietnam. However, this performance was partly offset by tender phasing in Europe.

 

RSV (Arexvy)	182	–	–

Arexvy, a respiratory syncytial virus (RSV) vaccine for older adults, delivered Q1 2024 sales of £182 million, reflecting continued strong consumer uptake and leading market share. In the US, Q1 2024 sales were £154 million, with the overwhelming majority of doses administered in the retail setting. Arexvy maintained around two-thirds of the vaccination share, while demand decreased overall in line with anticipated seasonality patterns. More than seven million of the 83 million US adults(1) aged 60 and older at risk have been protected by Arexvy since the launch in Q3 2023. The performance in Q1 2024 also reflected initial tender deliveries in Saudi Arabia, continued consumer uptake in Canada, and a new launch inventory build in Brazil.

 

Established Vaccines	838	3%	7%

In Q1 2024, Established Vaccines' growth was driven by an increased supply of measles, mumps, rubella, and varicella vaccines in International, a higher share of Rotarix in the US and increased demand in International. Infanrix/Pediarix decreased due to competitive pressure in the US.

 

Specialty Medicines	Total	2,522	13%	17%
	Excluding COVID	2,521	14%	19%

Specialty Medicines sales increased by double digits in the quarter, reflecting continued growth across disease areas, with strong performances in HIV, Respiratory/Immunology and Oncology.

 

HIV	1,613	10%	14%

In Q1 2024 HIV delivered double digit growth, which was primarily driven by a 2 percentage point increase in market share versus Q1 2023 as a result of strong patient demand for Oral 2DR (Dovato, Juluca) and long-acting medicines (Cabenuva, Apretude), as well as favourability in the quarter on pricing and tender phasing.

 

Oral 2DR	640	17%	21%

Oral 2-drug regimens sales in the quarter were £640 million, which now represents 40% of the total HIV portfolio. Dovato continues to be the highest selling product in the HIV portfolio with sales of £483 million in the quarter and growing 27% versus Q1 2023.

 

Long-Acting Medicines	267	77%	83%

Long-Acting Medicine sales in the quarter were £267 million, growing £116 million at AER; £125 million at CER versus Q1 2023 and now represent 17% of the total HIV portfolio compared to 10% for Q1 2023. Cabenuva sales in Q1 2024 were £213 million and growing 73% driven by strong patient demand. Apretude sales in Q1 2024 were £54 million, growing £30 million at AER; £32 million at CER compared to Q1 2023.

 

Respiratory/Immunology and Other	635	6%	11%

Sales primarily comprise contributions from Nucala in respiratory and Benlysta in immunology. In Q1 2024, sales growth for Nucala and Benlysta increased, mainly driven by demand in European and International markets. However, this performance was reduced by the US, where the growth of the medicines remained broadly stable. Volume demand growth was partly offset by the impact of channel inventory reduction following a channel inventory build in Q4 2023.

 

Nucala	374	8%	13%

Nucala, is an IL-5 antagonist monoclonal antibody treatment for severe asthma, with additional indications including chronic rhinosinusitis with nasal polyps, eosinophilic granulomatosis with polyangiitis (EGPA), and hypereosinophilic syndrome (HES). In Q1 2024, sales growth was driven by strong performances in Europe and International regions, which reflected higher patient demand for treatments addressing eosinophilic-led disease.

 

(1)	United States Census Bureau, International Database, Year 2023.

 

 

	Q1 2024
	£m	AER	CER
Benlysta	260	3%	8%

Benlysta, a monoclonal antibody treatment for Lupus, continues to grow consistently, representing strong demand and volume growth in European and International markets. Bio penetration rates have increased in certain International markets, particularly in Japan and China.

 

Oncology	273	>100%	>100%

In Q1 2024, Oncology sales growth increased driven by strong patient growth for Zejula, a PARP(1), Jemperli, a PD-1(2) blocking antibody, and Ojjaara/Omjjara, a daily JAK1/JAK2 and ACVR1(3) inhibitor. Jemperli, a medicine for front-line treatment in combination with chemotherapy for patients with dMMR/MSI-H primary advanced or recurrent endometrial cancer, continued to grow strongly and delivered sales of £80 million in the quarter. Ojjaara/Omjjara, a treatment for myelofibrosis patients with anaemia, launched in the US in Q3 2023 and in the UK and Germany in Q1 2024, has seen strong uptake since launch and delivered £52 million of sales in the quarter.

 

Zejula	141	24%	27%

Zejula delivered double-digit sales growth in the quarter, with strong performances across all regions following increased patient demand and higher volumes. In addition, new launches, particularly in the International region, also contributed to the performance.

 

General Medicines	2,564	(4%)	1%

Sales include contributions from both the Respiratory and Other General Medicine portfolios. In Q1 2024, sales decreased 4% at AER but increased by 1% at CER. This increase was driven primarily by strong demand across all regions for Trelegy, a chronic obstructive pulmonary disease (COPD) and asthma medicine. The performance also included increased growth for Anoro in Europe and International, and a strong antibiotic performance in International markets. However, this performance was primarily offset by a decrease across the Established Respiratory and Other General Medicine portfolios following the adverse impact of removing the Average Manufacturer Price (AMP) cap on Medicaid drug prices in the US. This removal particularly impacted the performance of Advair, Flovent, and Lamictal in the quarter due to significant pricing reductions, reduced commercial contracting, and the decision to discontinue branded Flovent. However, the increased use of authorised generic versions of Advair and Flovent has partially offset the impact of AMP cap removal while, significantly, continuing to provide access to patients. 

 

Respiratory	1,725	(2%)	2%

In Q1 2024, the increase in sales growth reflected Trelegy's strong performance in all regions and the increased demand for Anoro, particularly in Europe and International. However, as mentioned above, this was partially offset by the decrease across the Established Respiratory portfolio and the removal of the AMP cap.

 

Trelegy	591	27%	33%

Trelegy is the most prescribed single inhaler triple therapy (SITT) treatment worldwide for COPD and asthma. In Q1 2024 sales growth significantly increased across all regions, reflecting strong patient demand, single-inhaled triple therapy class growth, and increased market share.

 

Seretide/Advair	282	(17%)	(13%)

Seretide/Advair is a combination treatment used to treat asthma and COPD. In Q1 2024, the decrease in sales reflected continued generic erosion from competitor products in Europe and International and the removal of the AMP cap on Medicaid drug prices in the US.

 

Other General Medicines	839	(7%)	(2%)

The performance in Q1 2024 was adversely impacted by ongoing generic competition and the removal of the AMP cap on Medicaid drug prices in the US, notably impacting Lamictal's performance. This performance was partially offset by increased antibiotic growth in International markets.

 

 

 

Footnotes:

 

 

(1)	PARP: a Poly ADP ribose polymerase
(2)	PD-1: a programmed death receptor-1 blocking antibody
(3)	JAK1/JAK2 and ACVR1: once a-day, oral JAK1/JAK2 and activin A receptor type 1 (ACVR1) inhibitor

 

 

		Q1 2024
		£m	AER	CER
US	Total	3,589	10%	14%
	Excluding COVID	3,589	10%	14%

Vaccine sales increased by double-digits in Q1 2024, driven by continued strong consumer uptake and Arexvy's leading market share. The decrease in Shingrix sales reflected the comparison to Q1 2023, the prioritisation of other adult viral respiratory season vaccines, and the increasing challenge of activating harder to reach consumers. Favourable pricing and a prior-period channel inventory reduction partly offset this performance.

 

In Q1 2024, the sales of Specialty Medicines increased, driven by strong HIV and Oncology performances. However, despite increased patient demand, the performances of Nucala and Benlysta remained broadly stable in the quarter, reflecting the impact of channel inventory reductions.

 

General Medicine’s growth in Q1 2024 was driven by increased demand for Trelegy and the growth of the SITT market. However, this performance was offset by Established Respiratory and Other General Medicines following the removal of the AMP cap on Medicaid drug prices, which particularly impacted Advair, Flovent, and Lamictal.

 

Europe	Total	1,621	(5%)	(3%)
	Excluding COVID	1,621	1%	3%

In Q1 2024, Vaccine sales growth excluding COVID-19 solutions was broadly stable despite Shingrix growth across several markets following new national immunisation programmes. Lower Bexsero tender deliveries partly offset this performance.

 

Specialty Medicines sales increased by a double-digit percentage due to the performance in HIV and Oncology. The performance of Benlysta in immunology and Nucala in respiratory, including the impact of new indication launches, also contributed to the sales increase.

 

General Medicines sales were broadly stable in the quarter, reflecting strong growth in Trelegy and Anoro, offset by a decrease in Established Respiratory.

 

In Q1 2024, COVID-19 solutions adversely impacted growth by six percentage points. Excluding this impact, European sales increased by 3% at CER.

 

International	Total	2,153	9%	16%
	Excluding COVID	2,152	11%	18%

In Q1 2024, sales excluding COVID-19 solutions increased 11% at AER and 18% at CER, which reflected year-on-year exchange movements in several International markets compared to Q1 2023.

 

Vaccines' double-digit growth was driven by the expansion of public funding for Shingrix in Australia and Japan, together with earlier than anticipated supply to Zhifei, GSK’s co-promotion partner in China. Established vaccines also contributed to growth due to increased demand and supply phasing.

 

Specialty Medicine’s double-digit growth was driven by HIV, Nucala in Respiratory, Benlysta in Immunology, and Zejula in Oncology.

 

General Medicines sales were broadly stable, with Trelegy and Antibiotics delivering growth offset by a decrease in Other General Medicines and Established Respiratory.

 

In Q1 2024, COVID-19 solutions adversely impacted growth by two percentage points. Excluding this impact, International sales grew 18% in Q1 2024.

 

Financial performance

 

 

Total Results	Q1 2024
	£m		% AER		% CER
Turnover	7,363		6		10
Cost of sales	(1,970)		1		2
Selling, general and administration	(2,087)		(3)		–
Research and development	(1,434)		14		17
Royalty income	151		(16)		(16)
Other operating income/(expense)	(533)
Operating profit	1,490		(28)		(18)
Net finance expense	(134)		(23)		(22)
Share of after tax profit/(loss) of associates and joint ventures	(1)
Profit before taxation	1,355		(29)		(18)
Taxation	(274)
Tax rate %	20.2%
Profit after taxation	1,081		(34)		(23)
Profit attributable to non-controlling interests	35
Profit attributable to shareholders	1,046
	1,081		(34)		(23)
Earnings per share	25.7p		(30)		(19)
Financial Performance – Q1 2024 results unless otherwise stated, growth % and commentary at CER.

 

 

Core results Reconciliations between Total results and Core results for Q1 2024 and Q1 2023, are set out on pages 20 and 21.

 

	Q1 2024
	£m		% AER		% CER
Turnover	7,363		6		10
Cost of sales	(1,733)		(1)		–
Selling, general and administration	(1,979)		(4)		(2)
Research and development	(1,359)		11		14
Royalty income	151		(16)		(16)
Core operating profit	2,443		17		27
Core profit before taxation	2,310		20		32
Taxation	(404)		33		46
Core profit after taxation	1,906		18		29
Core profit attributable to non-controlling interests	154
Core profit attributable to shareholders	1,752
	1,906		18		29
Earnings per share	43.1p		16		28

 

		Q1 2024
		£m	AER	CER
Cost of sales	Total	1,970	1%	2%
	% of sales	26.8%	(1.2%)	(2.1%)
	Core	1,733	(1%)	–
	% of sales	23.5%	(1.7%)	(2.5%)

Total and Core cost of sales as a percentage of sales decreased in Q1 2024 primarily driven by mix benefits from the growth in higher margin Arexvy, Shingrix and Specialty products as well as regional margin mix from higher US sales. 

 

		Q1 2024
		£m	AER	CER
Selling, general & administration	Total	2,087	(3%)	–
	% of sales	28.3%	(2.5%)	(3.0%)
	Core	1,979	(4%)	(2%)
	% of sales	26.9%	(2.8%)	(3.3%)

Disciplined SG&A investment to support global market expansion and disease awareness for Arexvy and Shingrix was more than offset by a 6 percentage point favourable impact of the reversal of the legal provision taken in Q1 2023 for the Zejula royalty dispute, following a successful appeal. Total SG&A also included an increase in significant legal costs reflecting increased legal fees (see details on page 22).

 

		Q1 2024
		£m	AER	CER
Research & development	Total	1,434	14%	17%
	% of sales	19.5%	1.3%	1.0%
	Core	1,359	11%	14%
	% of sales	18.5%	0.9%	0.6%

In Q1 2024, R&D expense increased due to continued investment across disease areas, including bepirovirsen (chronic hepatitis B) and the advancement of clinical trial programmes associated with the pneumococcal Multi Antigen Presenting System (MAPS) and mRNA in Infectious Diseases.

 

In HIV, early-stage research expenses increased following investment in next-generation long-acting treatment and preventative medicines. In Respiratory and Oncology, investment increased to support lifecycle innovation and late-stage clinical development programmes for depemokimab (asthma and eosinophilic inflammation), camlipixant (refractory chronic cough), and Jemperli (endometrial cancer). Lower R&D expenses predominately related to Arexvy in Infectious Disease and Zejula and Ojjaara in Oncology partly offset this.

 

		Q1 2024
		£m	AER	CER
Royalty income	Total	151	(16%)	(16%)
	Core	151	(16%)	(16%)

The decrease in Total and Core royalty income in Q1 2024 is primarily related to the cessation of the majority of Gardasil royalties at the end of 2023, with Q1 2024 Gardasil royalties of £22 million (Q1 2023: £71 million). This was partly offset by increases in Kesimpta and Biktarvy royalties.

 

		Q1 2024
		£m	AER	CER
Other operating income/(expense)	Total	(533)	>(100%)	>(100%)

In Q1 2024 other operating expense reflected a charge of £685 million (Q1 2023: £271 million credit) arising from the remeasurement of contingent consideration liabilities primarily reflecting improved longer term HIV prospects and foreign currency movements and the liabilities for the Pfizer, Inc. (Pfizer) put option. This was partly offset by a fair value gain of £57 million (Q1 2023: £65 million loss) on the retained stake in Haleon plc (Haleon) and other net income of £95 million (Q1 2023: £91 million).

 

		Q1 2024
		£m	AER	CER
Operating profit	Total	1,490	(28%)	(18%)
	% of sales	20.2%	(9.7%)	(7.8%)
	Core	2,443	17%	27%
	% of sales	33.2%	3.1%	4.6%

Total operating profit margin was lower in Q1 2024 primarily due to unfavourable movements in contingent consideration liabilities reflecting improved longer term HIV prospects and foreign currency movement, partly offset by a fair value gain on the retained stake in Haleon (Q1 2023 fair value loss).

 

Core operating profit in the quarter benefitted from strong sales, favourable product mix and the reversal of the legal provision taken in Q1 2023 for the Zejula royalty dispute, following a successful appeal. This was partly offset by increased investment in R&D and growth assets, and lower royalty income. The adverse impact of lower sales of COVID-19 solutions was eight percentage points of Core operating profit growth, with minimal impact on Core operating profit margin.

 

		Q1 2024
		£m	AER	CER
Net finance costs	Total	134	(23%)	(22%)
	Core	132	(22%)	(22%)

The decrease in net finance costs in Q1 2024 was mainly driven by the net cost of certain bond buybacks completed in Q1 2023 and higher interest income on cash.

 

		Q1 2024
		£m	AER	CER
Taxation	Total	274	(1%)	13%
	Tax rate %	20.2%
	Core	404	33%	46%
	Tax rate %	17.5%

The effective tax rate on Core profits is broadly in line with expectations for the year and includes the impact of the  OECD’s  BEPS Pillar Two model framework which came into effect from 1 January 2024. Issues related to taxation are described in Note 14, ‘Taxation’ in the Annual Report 2023. The Group continues to believe it has made adequate provision for the liabilities likely to arise from periods that are open and not yet agreed by relevant tax authorities. The ultimate liability for such matters may vary from the amounts provided and is dependent upon the outcome of agreements with relevant tax authorities.

 

		Q1 2024
		£m	AER	CER
Non-controlling interests ("NCIs")	Total	35	(75%)	(66%)
	Core	154	27%	38%

The decrease in Total profit allocated to NCIs in the quarter was primarily driven by lower ViiV Healthcare profits (including the remeasurement loss on the contingent consideration liability) with an allocation of £28 million (Q1 2023: £140 million), partly offset by higher net profits in some of the Group's other entities.

 

The increase in Core profit from operations allocated to NCIs in Q1 2024 primarily reflected higher profit allocations from ViiV Healthcare of £147 million (Q1 2023: £120 million), as well as higher net profits in some of the Group’s other entities with NCIs.

 

 

		Q1 2024
		£p	AER	CER
Earnings per share	Total	25.7p	(30%)	(19%)
	Core	43.1p	16%	28%

The increase in the Core EPS in the quarter reflected the growth in Core operating profit as well as lower finance costs, partly offset by higher non-controlling interests and a higher effective taxation rate. Lower sales of COVID-19 solutions reduced Core EPS by nine percentage points.

 

The decrease in the Q1 2024 Total EPS primarily reflected higher charges related to the remeasurement of contingent consideration liabilities reflecting improved longer term HIV prospects and foreign currency movement partly offset by a fair value gain on the retained stake in Haleon (compared to a fair value loss in Q1 2023) and a favourable benefit from lower non-controlling interests.

 

The results for Q1 2024 are based on average exchange rates, principally £1/$1.27, £1/€1.16 and £1/Yen 187. The period-end exchange rates were £1/$1.26, £1/€1.17 and £1/Yen 191. Comparative exchange rates are given on page 34.

 

		Q1 2024
		£m/£p	AER	CER
Turnover		7,363	6%	10%
Earnings per share	Total	25.7p	(30%)	(19%)
	Core	43.1p	16%	28%

In Q1 2024, the adverse currency impact primarily reflected the strengthening of Sterling against the US Dollar, Euro and Yen, as well as the weakening of emerging market currencies against Sterling. Exchange gains or losses on the settlement of intercompany transactions had an adverse two percentage point impact on Core EPS.

 

 

Cash generation

 

Cash flow
	Q1 2024 £m		Q1 2023 £m
Cash generated from operations (£m)	1,126		287
Net cash generated from operating activities (£m)	958		53
Free cash inflow/(outflow)* (£m)	289		(689)
Free cash flow growth (%)	>100%		>(100)%
Free cash flow conversion* (%)	28%		3%
Total net debt** (£m)	14,961		17,950

 

 

*	Free cash flow  and free cash flow conversion are defined on page 47. Free cash flow is analysed on page 37.
**	Net debt is analysed on page 37.

 

Cash generated from operations for the quarter was £1,126 million (Q1 2023: £287 million). The increase primarily reflected higher operating profit and higher receivables' collections, driven by the timing of sales and collections particularly for Arexvy, partly offset by timing of returns and rebates.

 

Total contingent consideration cash payments in the quarter were £309 million (Q1 2023: £291 million), including cash payments made to Shionogi & Co. Ltd (Shionogi) of £300 million (Q1 2023: £287 million). £306 million (Q1 2023: £290 million) of these were recognised in cash flows from operating activities.

 

Free cash inflow was £289 million for the quarter (Q1 2023: £689 million outflow). In addition to the increase in cash generated from operations the increase in free cash flow in the quarter was primarily driven by lower tax payments, lower net interest paid and lower dividends paid to non-controlling interests. This was partly offset by increased capital expenditure.

 

 

At 31 March 2024, net debt was £14,961 million, compared with £15,040 million at 31 December 2023, comprising gross debt of £17,772 million and cash and liquid investments of £2,811 million. See net debt information on page 36.

 

Net debt decreased by £79 million primarily due to £289 million free cash inflow and £1,055 million proceeds from the disposal of investments, including the partial sale of the retained stake in Haleon. This was partly offset by the net acquisition cost of Aiolos Bio, Inc. (Aiolos) for £719 million and dividends paid to shareholders of £568 million.

 

At 31 March 2024, GSK had short-term borrowings (including overdrafts and lease liabilities) repayable within 12 months of £2,616 million with loans of £1,431 million repayable in the subsequent year.

 

 

Contents	Page
Q1 2024 pipeline highlights	14
ESG	16
Total and Core results	18
Income statement	23
Statement of comprehensive income	24
Balance sheet	25
Statement of changes in equity	26
Cash flow statement - three months ended 31 March 2024	27
Sales tables - three months ended 31 March 2024	28
Segment information	31
Legal matters	32
Returns to shareholders	33
Additional information	34
Net debt information	36
Related party transactions	37
R&D commentary	38
Reporting definitions	47
Guidance, assumptions and cautionary statements	49
Independent Auditor's review report to GSK plc	50

 

 

Contacts
GSK plc (LSE/NYSE:GSK) is a global biopharma company with a purpose to unite science, technology, and talent to get ahead of disease together. Find out more at www.gsk.com.

 

 

GSK enquiries:
Media	Tim Foley	+44 (0) 20 8047 5502	(London)
	Kathleen Quinn	+1 202 603 5003	(Washington)
Investor Relations	Nick Stone	+44 (0) 7717 618834	(London)
	James Dodwell	+44 (0) 7881 269066	(London)
	Mick Readey	+44 (0) 7990 339653	(London)
	Joshua Williams	+44 (0) 7385 415719	(London)
	Jeff McLaughlin	+1 215 589 3774	(Philadelphia)
Registered in England & Wales: No. 3888792
Registered Office: 980 Great West Road Brentford, Middlesex TW8 9GS
Q1 2024 pipeline highlights (since 31 January 2024)

 

	Medicine/vaccine	Trial (indication, presentation)	Event
Regulatory submissions or acceptances	Arexvy	RSV, adults aged 50-59 years	Regulatory acceptance (US)
	MenABCWY (gen 1) vaccine candidate	Meningococcal ABCWY	Regulatory acceptance (US)
	Shingrix	Shingles, adults aged 18+ years	Regulatory acceptance (CN)
	Jemperli	RUBY part 1 (OS overall population, 1L endometrial cancer)	Regulatory acceptance (US)
Phase III data readouts or other significant events	gepotidacin	EAGLE-1 (urogenital gonorrhoea)	Positive phase III data readout
	Blenrep	DREAMM-8 (2L + multiple myeloma)	Positive phase III data readout
	cabotegravir	LATITUDE (HIV long-acting injectable)	Positive phase III data readout
	Jemperli	RUBY Part 1 (OS) and Part 2 (PFS) (1L endometrial cancer)	Additional positive phase III data readout

 

Anticipated news flow

 

Timing	Medicine/vaccine	Trial (indication, presentation)	Event
H1 2024	Arexvy	RSV, older adults aged 50-59 years	Regulatory decision (US)
	momelotinib	MOMENTUM (myelofibrosis with anaemia)	Regulatory decision (JP)
	depemokimab	SWIFT-1/2 (severe asthma)	Phase III data readout
H2 2024	Arexvy	RSV, older adults aged 50-59 years	Regulatory decision (EU, JP)
	gepotidacin	EAGLE-2/3 (uncomplicated urinary tract infection)	Regulatory submission (US)
	MenABCWY (gen 1) vaccine candidate	Meningococcal ABCWY	Regulatory submission (EU)
	depemokimab	ANCHOR-1/2 (chronic rhinosinusitis with nasal polyps)	Phase III data readout
	depemokimab	ANCHOR-1/2 (chronic rhinosinusitis with nasal polyps)	Regulatory submission (US)
	depemokimab	SWIFT-1/2 (severe asthma)	Regulatory submission (US)
	Nucala	Chronic rhinosinusitis with nasal polyps	Regulatory decision (JP)
	Nucala	MATINEE (chronic obstructive pulmonary disease)	Phase III data readout
	Nucala	MATINEE (chronic obstructive pulmonary disease)	Regulatory submission (US)
	Blenrep	DREAM-7/8 (2L + multiple myeloma)	Regulatory submission (US, EU, JP)
	Blenrep	DREAMM-7 (2L + multiple myeloma)	Regulatory submission (CN)
	Jemperli	RUBY part 1 (OS overall population, 1L endometrial cancer)	Regulatory decision (US)
	Jemperli	RUBY part 1 (OS overall population, 1L endometrial cancer)	Regulatory submission (EU)
	Zejula	FIRST (1L maintenance ovarian cancer)	Phase III data readout
	Zejula	ZEAL (1L maintenance non-small cell lung cancer)	Phase III data readout
	linerixibat	GLISTEN (cholestatic pruritus in primary biliary cholangitis)	Phase III data readout

 

Anticipated news flow continued

 

Timing	Medicine/vaccine	Trial (indication, presentation)	Event
2025	gepotidacin	EAGLE-2/3 (uncomplicated urinary tract infection)	Regulatory decision (US)
	gepotidacin	EAGLE-1 (urogenital gonorrhoea)	Regulatory submission (US)
	gepotidacin	EAGLE-1 (urogenital gonorrhoea)	Regulatory decision (US)
	geopotidacin	EAGLE-J (uncomplicated urinary tract infection)	Regulatory submission (JP)
	MenABCWY (gen 1) vaccine candidate	Meningococcal ABCWY	Regulatory decision (US)
	Shingrix	Shingles, adults aged 18+ years	Regulatory decision (CN)
	tebipenem pivoxil	PIVOT-PO (complicated urinary tract infection)	Phase III data readout
	tebipenem pivoxil	PIVOT-PO (complicated urinary tract infection)	Regulatory submission (US)
	camlipixant	CALM-1/2 (refractory chronic cough)	Phase III data readout
	camlipixant	CALM-1/2 (refractory chronic cough)	Regulatory submission (US, EU)
	depemokimab	SWIFT-1/2 (severe asthma)	Regulatory decision (US, JP)
	depemokimab	SWIFT-1/2 (severe asthma)	Regulatory submission (EU, CN, JP)
	depemokimab	ANCHOR-1/2 (chronic rhinosinusitis with nasal polyps)	Regulatory decision (US, JP)
	depemokimab	ANCHOR-1/2 (chronic rhinosinusitis with nasal polyps)	Regulatory submission (EU, CN, JP)
	depemokimab	OCEAN (eosinophilic granulomatosis with polyangiitis)	Phase III data readout
	Nucala	Chronic rhinosinusitis with nasal polyps	Regulatory decision (CN)
	Nucala	MATINEE (chronic obstructive pulmonary disease)	Regulatory decision (US)
	Nucala	MATINEE (chronic obstructive pulmonary disease)	Regulatory submission (CN, EU)
	Blenrep	DREAMM-7/8 (2L+ multiple myeloma)	Regulatory decision (US, EU, JP)
	Blenrep	DREAMM-8 (2L+ multiple myeloma)	Regulatory submission (CN)
	cobolimab	COSTAR (non-small cell lung cancer)	Phase III data readout
	cobolimab	COSTAR, (2L non-small cell lung cancer)	Regulatory submission (US, EU)
	Jemperli	RUBY part 1 (OS overall population, 1L endometrial cancer)	Regulatory decision (EU)
	linerixibat	GLISTEN (cholestatic pruritus in primary biliary cholangitis)	Regulatory submission (US, EU, CN, JP)
	linerixibat	GLISTEN (cholestatic pruritus in primary biliary cholangitis)	Regulatory decision (US)

 

Refer to pages 38 to 46 for further details on several key medicines and vaccines in development by therapy area.

 

Trust: progress on our six priority areas for responsible business

 

Building Trust by operating responsibly is integral to GSK’s strategy and culture. This will support growth and returns to shareholders, reduce risk, and help GSK’s people thrive while delivering sustainable health impact at scale. The company has identified six Environmental, Social, and Governance (ESG) focus areas that address what is most material to GSK’s business and the issues that matter the most to its stakeholders. Highlights below include activity since Q4 2023 results. For more details on annual updates, please see GSK's ESG Performance Report 2023. (1)

 

Commitment: to make GSK’s vaccines and medicines available at value-based prices that are sustainable for the business and implement access strategies that increase the use of GSK’s vaccines and medicines to treat and protect underserved people.

 

●	GSK announced a cap of $35 per month on eligible U.S. patient out-of-pocket costs for its entire portfolio of asthma and COPD inhalers. This announcement builds on GSK’s decades-long commitment to making products accessible to those who need them. More information can be found here. (2)
●	GSK announced additional funding and new data and resources under the COiMMUNITY Initiative to help achieve higher adult vaccination rates and health equity in the US and address ongoing barriers to adult immunisation. In 2024, GSK is giving up to $2 million in COiMMUNITY Initiative grants. More information can be found here. (3)
●	Performance metrics related to access are updated annually with related details in GSK’s ESG Performance Report 2023 on page 10.

 

Commitment: develop novel products and technologies to treat and prevent priority diseases, including pandemic threats.

 

●	GSK announced positive headline results from EAGLE-1 phase III trial for gepotidacin in uncomplicated urogenital gonorrhoea. Neisseria gonorrhoeae, the bacteria causing gonorrhoea, is recognised by the World Health Organisation as a priority pathogen, for which resistance to existing treatments is rising. More information can be found here. (4)
●	In March, the GSK-developed tuberculosis (TB) vaccine candidate M72/AS01E entered phase III trials, sponsored by Wellcome and the Bill & Melinda Gates Medical Research Institute. This is the first potential new TB vaccine which meets the WHO target product profile in over 100 years. More information on GSK’s TB and Global health efforts can be found here. (5)
●	Performance metrics related to global health and health security are updated annually with related details in GSK’s ESG Performance Report 2023 on page 15.

 

Commitment: committed to a net zero, nature-positive, healthier planet with ambitious goals set for 2030 and 2045.

 

●	In February, the global environmental non-profit CDP published its annual scoring of corporate environmental performance. CDP sets high and constantly evolving standards for environmental leadership to support companies to improve their level of ambition and action on climate and nature. This year’s results, which are based on 2022 performance, reflect a year-over-year improvement for GSK for Water Security score (A- from B) and a continued high A- score for Climate Change. GSK also scored well in two Forest commodities receiving a B for paper and B for palm oil.
●	In February, GSK announced a virtual power purchase agreement to source renewable electricity through two new solar projects in Spain to facilitate 50% of its European sites' electricity demand for 12 years, from mid-2026.
●	Whilst GSK is focused on emissions reductions to meet its carbon targets, at the same time, it is investing in high quality nature protection and restoration projects that support GSK’s net-zero and nature positive goals, and deliver co-benefits to human health. In March, GSK disclosed it has invested in Climate Asset Management’s Nature Based Carbon Fund, which aims to invest in nature projects in developing economies, to provide long-lasting, verified, positive impact at scale for the climate, biodiversity and local communities. This is a long-term investment over the next 15 years, which aims to secure approximately a quarter of credits needed in 2030, to meet GSK’s commitment to invest in nature-based solutions for 20% of its 2020 footprint.
●	Performance metrics related to environment are updated annually with related details in GSK’s ESG Performance Report 2023 on page 18.

 

Commitment: create a diverse, equitable and inclusive workplace; enhance recruitment of diverse patient populations in GSK clinical trials; and support diverse communities.

 

●	Performance metrics related to diversity, equity and inclusion are updated annually with related details in GSK’s ESG Performance Report 2023 on page 26.

 

Commitment: promote ethical behaviour across GSK’s business by supporting its employees to do the right thing and working with suppliers that share GSK’s standards and operate responsibly.

●	Performance metrics related to ethical standards are updated annually with related details in GSK’s ESG Performance Report 2023 on page 30.

 

Commitment: maintain robust quality and safety processes and responsibly use data and new technologies.

●	Performance metrics related to product governance are updated annually with related details in GSK’s ESG Performance Report 2023 on page 35.

 

Detailed below is how GSK performs in key ESG ratings.

 

External benchmark	Current score/ranking	Previous score/ranking	Comments
S&P Global’s Corporate Sustainability Assessment	84	86	1st in the pharmaceutical industry group; Assessment conducted annually, current score updated Nov 2023
Access to Medicines Index	4.06	4.23	Led the bi-annual index since its inception in 2008; Updated bi-annually, current results from Nov 2022
Antimicrobial resistance benchmark	84%	86%	Led the bi-annual benchmark since its inception in 2018; Current ranking updated Nov 2021
CDP Climate Change	A-	A-	Updated annually, current scores updated Feb 2024 (for supplier engagement, March 2023)
CDP Water Security	A-	B
CDP Forests (palm oil)	B	A-
CDP Forests (timber)	B	B
CDP supplier engagement rating	Leader	Leader
Sustainalytics	16.7	18.6	1st percentile in pharma subindustry group; Lower score represents lower risk. Current ranking updated Sept 2023
MSCI	AA	AA	Last rating action date: Sept 2023
Moody’s ESG solutions	62	61	Current score updated Aug 2023
ISS Corporate Rating	B+	B+	Current score updated June 2023
FTSE4Good	Member	Member	Member since 2004, latest review in June 2023
ShareAction’s Workforce Disclosure Initiative	79%	77%	Current score updated Jan 2024

 

 

Footnotes:

 

 

(1)	https://www.gsk.com/media/11009/esg-performance-report-2023.pdf
(2)	https://us.gsk.com/en-us/media/press-releases/gsk-announces-cap-of-35-per-month-on-us-patient-out-of-pocket-costs-for-its-entire-portfolio-of-asthma-and-copd-inhalers/
(3)	https://us.gsk.com/en-us/media/press-releases/gsk-doubles-coimmunity-grant-funding-launches-patient-resources-as-adult-vaccination-rates-begin-to-show-promising-rise/
(4)	https://www.gsk.com/en-gb/media/press-releases/gsk-announces-positive-headline-results-from-eagle-1-phase-iii-trial-for-gepotidacin-in-uncomplicated-urogenital-gonorrhoea-gc/
(5)	https://www.gsk.com/en-gb/responsibility/global-health-and-health-security/using-our-science-for-global-health/

 

 

Total and Core results

 

Total reported results represent the Group’s overall performance.

 

GSK has made one update to its reporting framework in Q1 2024 which is to change the description of Adjusted results to Core results to align with European peers in the pharmaceutical industry but with no change to the basis or figures. There is no change to Total Results or the definition of Adjusting items.

 

GSK uses a number of non-IFRS measures to report the performance of its business. Core results and other non-IFRS measures may be considered in addition to, but not as a substitute for, or superior to, information presented in accordance with IFRS. Core results are defined below and other non-IFRS measures are defined on page 47.

 

GSK believes that Core results, when considered together with Total results, provide investors, analysts and other stakeholders with helpful complementary information to understand better the financial performance and position of the Group from period to period, and allow the Group’s performance to be more easily compared against the majority of its peer companies. These measures are also used by management for planning and reporting purposes. They may not be directly comparable with similarly described measures used by other companies.

 

GSK encourages investors and analysts not to rely on any single financial measure but to review GSK’s quarterly results announcements, including the financial statements and notes, in their entirety.

 

GSK is committed to continuously improving its financial reporting, in line with evolving regulatory requirements and best practice. In line with this practice, GSK expects to continue to review and refine its reporting framework.

 

Core results exclude the following items in relation to our operations from Total results, together with the tax effects of all of these items:

●	amortisation of intangible assets (excluding computer software and capitalised development costs)
●	impairment of intangible assets (excluding computer software) and goodwill
●	major restructuring costs, which include impairments of tangible assets and computer software, (under specific Board approved programmes that are structural, of a significant scale and where the costs of individual or related projects exceed £25 million), including integration costs following material acquisitions
●	transaction-related accounting or other adjustments related to significant acquisitions
●	proceeds and costs of disposal of associates, products and businesses; significant settlement income; significant legal charges (net of insurance recoveries) and expenses on the settlement of litigation and government investigations; other operating income other than royalty income, and other items

 

Costs for all other ordinary course smaller scale restructuring and legal charges and expenses from operations are retained within both Total and Core results.

 

As Core results include the benefits of Major restructuring programmes but exclude significant costs (such as significant legal, major restructuring and transaction items) they should not be regarded as a complete picture of the Group’s financial performance, which is presented in Total results. The exclusion of other Adjusting items may result in Core earnings being materially higher or lower than Total earnings. In particular, when significant impairments, restructuring charges and legal costs are excluded, Core earnings will be higher than Total earnings.

 

GSK has undertaken a number of Major restructuring programmes in response to significant changes in the Group’s trading environment or overall strategy or following material acquisitions. Within the Pharmaceuticals sector, the highly regulated manufacturing operations and supply chains and long lifecycle of the business mean that restructuring programmes, particularly those that involve the rationalisation or closure of manufacturing or R&D sites are likely to take several years to complete. Costs, both cash and non-cash, of these programmes are provided for as individual elements are approved and meet the accounting recognition criteria. As a result, charges may be incurred over a number of years following the initiation of a Major restructuring programme.

 

Significant legal charges and expenses are those arising from the settlement of litigation or government investigations that are not in the normal course and materially larger than more regularly occurring individual matters. They also include certain major legacy matters.

 

Reconciliations between Total and Core results, providing further information on the key Adjusting items, are set out on pages 20 and 21.

 

GSK provides earnings guidance to the investor community on the basis of Core results. This is in line with peer companies and expectations of the investor community, supporting easier comparison of the Group’s performance with its peers. GSK is not able to give guidance for Total results as it cannot reliably forecast certain material elements of the Total results, particularly the future fair value movements on contingent consideration and put options that can and have given rise to significant adjustments driven by external factors such as currency and other movements in capital markets.

 

 

ViiV Healthcare is a subsidiary of the Group and 100% of its operating results (turnover, operating profit, profit after tax) are included within the Group income statement.

 

Earnings are allocated to the three shareholders of ViiV Healthcare on the basis of their respective equity shareholdings (GSK 78.3%, Pfizer 11.7% and Shionogi 10%) and their entitlement to preferential dividends, which are determined by the performance of certain products that each shareholder contributed. As the relative performance of these products changes over time, the proportion of the overall earnings allocated to each shareholder also changes. In particular, the increasing proportion of sales of dolutegravir and cabotegravir-containing products has a favourable impact on the proportion of the preferential dividends that is allocated to GSK. Adjusting items are allocated to shareholders based on their equity interests. GSK was entitled to approximately 84% of the Total earnings and 83% of the Core earnings of ViiV Healthcare for 2023.

 

As consideration for the acquisition of Shionogi’s interest in the former Shionogi-ViiV Healthcare joint venture in 2012, Shionogi received the 10% equity stake in ViiV Healthcare and ViiV Healthcare also agreed to pay additional future cash consideration to Shionogi, contingent on the future sales performance of the products being developed by that joint venture, dolutegravir and cabotegravir. Under IFRS 3 ‘Business combinations’, GSK was required to provide for the estimated fair value of this contingent consideration at the time of acquisition and is required to update the liability to the latest estimate of fair value at each subsequent period end. The liability for the contingent consideration recognised in the balance sheet at the date of acquisition was £659 million. Subsequent remeasurements are reflected within other operating income/(expense) and within Adjusting items in the income statement in each period.

 

Cash payments to settle the contingent consideration are made to Shionogi by ViiV Healthcare each quarter, based on the actual sales performance and other income of the relevant products in the previous quarter. These payments reduce the balance sheet liability and hence are not recorded in the income statement. The cash payments made to Shionogi by ViiV Healthcare in the three months ended 31 March 2024 were £300 million.

 

As the liability is required to be recorded at the fair value of estimated future payments, there is a significant timing difference between the charges that are recorded in the Total income statement to reflect movements in the fair value of the liability and the actual cash payments made to settle the liability.

 

Further explanation of the acquisition-related arrangements with ViiV Healthcare are set out on pages 84 and 85 of the Annual Report 2023.

 

Adjusting items

 

The reconciliations between Total results and Core results for Q1 2024 and Q1 2023 are set out below.

 

Three months ended 31 March 2024
	Total results £m		Intangible amort- isation £m		Intangible impair- ment £m		Major restruct- uring £m		Trans- action- related £m		Divest- ments, significant legal and other items £m		Core results £m
Turnover	7,363												7,363
Cost of sales	(1,970)		182				33		19		3		(1,733)
Gross profit	5,393		182				33		19		3		5,630
Selling, general and administration	(2,087)						17				91		(1,979)
Research and development	(1,434)		14		54		7						(1,359)
Royalty income	151												151
Other operating income/(expense)	(533)								685		(152)		–
Operating profit	1,490		196		54		57		704		(58)		2,443
Net finance cost	(134)										2		(132)
Share of after tax profit/(loss) of associates   and joint ventures	(1)												(1)
Profit before taxation	1,355		196		54		57		704		(56)		2,310
Taxation	(274)		(41)		(14)		(13)		(76)		14		(404)
Tax rate %	20.2%												17.5%
Profit after taxation	1,081		155		40		44		628		(42)		1,906
Profit attributable to non-controlling   interests	35								119				154
Profit attributable to shareholders	1,046		155		40		44		509		(42)		1,752
	1,081		155		40		44		628		(42)		1,906
Earnings per share	25.7p		3.8p		1.0p		1.1p		12.5p		(1.0p)		43.1p
Weighted average number of shares (millions)	4,069												4,069

 

 

Three months ended 31 March 2023
	Total results £m		Intangible amort- isation £m		Intangible impair- ment £m		Major restruct- uring £m		Trans- action- related £m		Divest- ments, significant legal and other items £m		Core results £m
Turnover	6,951												6,951
Cost of sales	(1,943)		151				35				5		(1,752)
Gross profit	5,008		151				35				5		5,199
Selling, general and administration	(2,143)						69				9		(2,065)
Research and development	(1,260)		18		16		4						(1,222)
Royalty income	180												180
Other operating income/(expense)	297								(271)		(26)		–
Operating profit	2,082		169		16		108		(271)		(12)		2,092
Net finance cost	(174)										4		(170)
Share of after tax profit/(loss) of associates   and joint ventures	(2)												(2)
Profit/(loss) on disposal of interest in associates	1										(1)		–
Profit before taxation	1,907		169		16		108		(271)		(9)		1,920
Taxation	(276)		(36)		(4)		(22)		15		20		(303)
Tax rate %	14.5%												15.8%
Profit after taxation	1,631		133		12		86		(256)		11		1,617
Profit attributable to non-controlling   interests	141								(20)				121
Profit attributable to shareholders	1,490		133		12		86		(236)		11		1,496
	1,631		133		12		86		(256)		11		1,617
Earnings per share	36.8p		3.3p		0.3p		2.1p		(5.8p)		0.3p		37.0p
Weighted average number of shares (millions)	4,044												4,044

 

 

Total Major restructuring charges incurred in Q1 2024 were £57 million (Q1 2023: £108 million), analysed as follows:

 

	Q1 2024						Q1 2023
	Cash £m		Non- cash £m		Total £m		Cash £m		Non- cash £m		Total £m
Separation Preparation restructuring   programme	28		8		36		37		47		84
Significant acquisitions	19		–		19		21		1		22
Legacy programmes	2		–		2		–		2		2
	49		8		57		58		50		108

 

The Separation Preparation programme incurred cash charges of £28 million primarily from restructuring in Global Supply Chain as well as some commercial and administrative functions. The non-cash charges of £8 million primarily reflected the write down of assets in manufacturing locations.

 

Costs of significant acquisitions relate to integration costs of Sierra Oncology Inc. (Sierra) and Affinivax Inc. (Affinivax) which were acquired in Q3 2022, BELLUS Health Inc. (Bellus) acquired in Q2 2023 and Aiolos acquired in Q1 2024.

 

Transaction-related adjustments resulted in a net charge of £704 million (Q1 2023: £271 million credit), the majority of which related to charges/credits for the remeasurement of contingent consideration liabilities, the liabilities for the Pfizer put option, and Pfizer and Shionogi preferential dividends in ViiV Healthcare.

 

Charge/(credit)	Q1 2024 £m		Q1 2023 £m
Contingent consideration on former Shionogi-ViiV Healthcare joint Venture   (including Shionogi preferential dividends)	586		(64)
ViiV Healthcare put options and Pfizer preferential dividends	66		(105)
Contingent consideration on former Novartis Vaccines business	28		(69)
Contingent consideration on acquisition of Affinivax	5		(33)
Other adjustments	19		–
Total transaction-related charges	704		(271)

 

The £586 million charge relating to the contingent consideration for the former Shionogi-ViiV Healthcare joint venture represented an increase in the valuation of the contingent consideration due to Shionogi by £479 million from updated sales forecasts and exchange rates, and the unwind of the discount for £107 million. The £66 million charge relating to the ViiV Healthcare put option and Pfizer preferential dividends represented an increase in the valuation of the put option primarily as a result of updated sales forecasts.

 

The ViiV Healthcare contingent consideration liability is fair valued under IFRS. An explanation of the accounting for the non-controlling interests in ViiV Healthcare is set out on page 19.

 

The £28 million charge relating to the contingent consideration on the former Novartis Vaccines business primarily relates to changes to future sales forecasts.

 

The £5 million charge relating to the contingent consideration on the acquisition of Affinivax primarily relates to the unwind of the discount.

 

Divestments, significant legal charges, and other items primarily included fair value gains on investments, including a £57 million fair value gain on the investment in Haleon and other net income of £95 million. Legal charges provide for all significant legal matters and are not broken out separately by litigation or investigation. Significant legal charges in the quarter primarily reflected prospective legal costs for the defence of the litigation relating to Zantac.

Financial information

Income statements

 

	Q1 2024 £m		Q1 2023 £m
TURNOVER	7,363		6,951
Cost of sales	(1,970)		(1,943)
Gross profit	5,393		5,008
Selling, general and administration	(2,087)		(2,143)
Research and development	(1,434)		(1,260)
Royalty income	151		180
Other operating income/(expense)	(533)		297
OPERATING PROFIT	1,490		2,082
Finance income	32		29
Finance expense	(166)		(203)
Share of after tax profit/(loss) of associates and joint ventures	(1)		(2)
Profit/(loss) on disposal of interests in associates and joint ventures	–		1
PROFIT BEFORE TAXATION	1,355		1,907
Taxation	(274)		(276)
Tax rate %	20.2%		14.5%
PROFIT AFTER TAXATION	1,081		1,631
Profit attributable to non-controlling interests	35		141
Profit attributable to shareholders	1,046		1,490
	1,081		1,631
EARNINGS PER SHARE	25.7p		36.8p
Diluted earnings per share	25.4p		36.5p

 

 

 

Statement of comprehensive income

 

	Q1 2024 £m		Q1 2023 £m
Total profit for the period	1,081		1,631
Items that may be reclassified subsequently to income statement:
Exchange movements on overseas net assets and net investment hedges	(190)		87
Reclassification of exchange movements on liquidation or disposal of   overseas subsidiaries and associates	–		(3)
Reclassification of cash flow hedges to income statement	2		1
	(188)		85
Items that will not be reclassified to income statement:
Exchange movements on overseas net assets of non-controlling interests	3		(14)
Fair value movements on equity investments	78		(168)
Tax on fair value movements on equity investments	(15)		22
Fair value movements on cash flow hedges	1		–
Remeasurement gains/(losses) on defined benefit plans	46		350
Tax on remeasurement losses/(gains) on defined benefit plans	(10)		(87)
	103		103
Other comprehensive income/(expense) for the period	(85)		188
Total comprehensive income for the period	996		1,819
Total comprehensive income for the period attributable to:
Shareholders	958		1,692
Non-controlling interests	38		127
	996		1,819

 

Balance sheet

 

	31 March 2024 £m		31 December 2023 £m
ASSETS
Non-current assets
Property, plant and equipment	8,952		9,020
Right of use assets	915		937
Goodwill	6,978		6,811
Other intangible assets	15,667		14,768
Investments in associates and joint ventures	46		55
Other investments	1,231		1,137
Deferred tax assets	5,863		6,049
Other non-current assets	1,654		1,584
Total non-current assets	41,306		40,361
Current assets
Inventories	5,702		5,498
Current tax recoverable	460		373
Trade and other receivables	6,831		7,385
Derivative financial instruments	57		130
Current equity investments	1,284		2,204
Liquid investments	21		42
Cash and cash equivalents	2,790		2,936
Assets held for sale	60		76
Total current assets	17,205		18,644
TOTAL ASSETS	58,511		59,005
LIABILITIES
Current liabilities
Short-term borrowings	(2,616)		(2,813)
Contingent consideration liabilities	(1,094)		(1,053)
Trade and other payables	(14,621)		(15,844)
Derivative financial instruments	(69)		(114)
Current tax payable	(720)		(500)
Short-term provisions	(726)		(744)
Total current liabilities	(19,846)		(21,068)
Non-current liabilities
Long-term borrowings	(15,156)		(15,205)
Corporation tax payable	(76)		(75)
Deferred tax liabilities	(288)		(311)
Pensions and other post-employment benefits	(2,306)		(2,340)
Other provisions	(510)		(495)
Contingent consideration liabilities	(5,981)		(5,609)
Other non-current liabilities	(1,119)		(1,107)
Total non-current liabilities	(25,436)		(25,142)
TOTAL LIABILITIES	(45,282)		(46,210)
NET ASSETS	13,229		12,795
EQUITY
Share capital	1,348		1,348
Share premium account	3,471		3,451
Retained earnings	7,935		7,239
Other reserves	1,086		1,309
Shareholders’ equity	13,840		13,347
Non-controlling interests	(611)		(552)
TOTAL EQUITY	13,229		12,795

 

Statement of changes in equity

 

	Share capital £m		Share premium £m		Retained earnings £m		Other reserves £m		Share- holder’s equity £m		Non- controlling interests £m		Total equity £m
At 1 January 2024	1,348		3,451		7,239		1,309		13,347		(552)		12,795
Profit for the period					1,046				1,046		35		1,081
Other comprehensive     income/(expense) for the period					(151)		63		(88)		3		(85)
Total comprehensive income/(expense)   for the period					895		63		958		38		996
Distributions to non-controlling interests											(97)		(97)
Dividends to shareholders					(568)				(568)				(568)
Realised after tax losses on disposal   or liquidation of equity investments					(47)		47						–
Share of associates and joint   ventures realised profit/(loss) on   disposal of equity investments					15		(15)						–
Shares issued			18						18				18
Write-down on shares held by ESOP Trusts					(141)		141						–
Shares acquired by ESOP Trusts			2		457		(459)						–
Share-based incentive plans					85				85				85
At 31 March 2024	1,348		3,471		7,935		1,086		13,840		(611)		13,229