H1 and Q2 2024 results
Strong underlying growth supports FY 2024 guidance upgrade, with both Total Revenue and Core EPS now expected to increase by a mid teens percentage at CER[1]
Revenue and EPS summary
| H1 2024 | % Change | Q2 2024 | % Change | ||||||||||||||
| $m | Actual | CER | $m | Actual | CER | ||||||||||||
| – Product Sales | 24,629 | 15 | 18 | 12,452 | 14 | 18 | |||||||||||
| – Alliance Revenue | 939 | 50 | 50 | 482 | 42 | 42 | |||||||||||
| – Collaboration Revenue | 49 | (78) | (78) | 4 | (98) | (98) | |||||||||||
| Total Revenue | 25,617 | 15 | 18 | 12,938 | 13 | 17 | |||||||||||
| Reported EPS | $2.65 | 13 | 23 | $1.24 | 6 | 15 | |||||||||||
| Core[2] EPS | $4.03 | (1) | 5 | $1.98 | (8) | (3) | |||||||||||
Financial performance for H1 2024 (Growth numbers at constant exchange rates)
‒ Total Revenue up 18% to $25,617m, driven by an 18% increase in Product Sales and continued growth in Alliance Revenue from partnered medicines
‒ Total Revenue growth from Oncology was 22%, CVRM 22%, R&I 22%, and Rare Disease 15%
‒ Core Product Sales Gross Margin[3] of 82%
‒ Core Operating Margin of 33%
‒ Core Tax Rate of 20%
‒ Core EPS increased 5% to $4.03. The increase in Core EPS was lower than Total Revenue growth principally due to gains recognised in the prior year, specifically a $241m gain on the disposal of Pulmicort Flexhaler US rights (Q1 2023), and a $712m gain relating to updates to contractual arrangements for Beyfortus (Q2 2023)
‒ Interim dividend increased 7c to $1.00 (77.6 pence, 10.79 SEK) has been declared
‒ Guidance for FY 2024 increased, with Total Revenue and Core EPS anticipated to grow by a mid teens percentage at CER (previously a low double-digit to low teens percentage). An increase in Collaboration Revenue is not assumed in the upgraded guidance
Pascal Soriot, Chief Executive Officer, AstraZeneca, said:
“Building on our strong growth in the first half of the year and continued underlying demand for our medicines we are upgrading our FY 2024 guidance for both Total Revenue and Core EPS.
At our Investor Day in May we set out a new revenue ambition to deliver $80 billion of Total Revenue by 2030. This is a clear reflection of the substantial growth potential we see from both our approved medicines and those in our late-stage pipeline. Already this year we have announced five positive, potentially practice-changing Phase III studies that are anticipated to meaningfully contribute to our growth.
In the year to date we have continued to make encouraging progress with several disruptive technologies, including antibody drug conjugates, bispecifics, cell and gene therapies, radioconjugates, and weight management medicines, all of which have the potential to drive our growth beyond 2030.”
Key milestones achieved since the prior results announcement
‒ Positive read-outs for Imfinzi in combination with chemotherapy in muscle-invasive bladder cancer (NIAGARA), Calquence in untreated mantle cell lymphoma (ECHO), Enhertu in HR-positive, HER2-low metastatic breast cancer (DESTINY-Breast06)
‒ US approvals for Imfinzi in combination with chemotherapy followed by Imfinzi monotherapy for primary advanced or recurrent endometrial cancer that is mismatch repair deficient (DUO-E). EU approvals for Truqap in combination with Faslodex for biomarker-positive estrogen receptor-positive, HER2‑negative advanced breast cancer (CAPItello-291), Tagrisso with the addition of chemotherapy for 1st‑line EGFRm NSCLC (FLAURA2). Japan and China approvals for Tagrisso with the addition of chemotherapy for the 1st–‑line EGFRm NSCLC (FLAURA2)
Guidance
Due to strong underlying growth in Product Sales and Alliance Revenue, the Company raises its Total Revenue and Core EPS guidance for FY 2024 at CER, based on the average foreign exchange rates through 2023.
Total Revenue is expected to increase by a mid teens percentage
(previously a low double-digit to low teens percentage)
Core EPS is expected to increase by a mid teens percentage
(previously a low double-digit to low teens percentage)
‒ An increase in Collaboration Revenue is not assumed in the upgraded guidance (previously assumed a substantial increase)
‒ Other operating income is expected to decrease substantially (FY 2023 included a $241m gain on the disposal of Pulmicort Flexhaler US rights, and a $712m one-time gain relating to updates to contractual arrangements for Beyfortus)
‒ The Core Tax rate is expected to be between 18-22%
The Company is unable to provide guidance on a Reported basis because it cannot reliably forecast material elements of the Reported results, including any fair value adjustments arising on acquisition-related liabilities, intangible asset impairment charges and legal settlement provisions. Please refer to the cautionary statements section regarding forward-looking statements at the end of this announcement.
Currency impact
If foreign exchange rates for July 2024 to December 2024 were to remain at the average rates seen in June 2024, it is anticipated that FY 2024 Total Revenue would incur a low single-digit percentage adverse impact compared to the performance at CER, and Core EPS would incur a mid single-digit percentage adverse impact. The Company’s foreign exchange rate sensitivity analysis is provided in Table 17.
Full half year report: https://otp.tools.investis.com/clients/uk/astrazeneca/rns/regulatory-story.aspx?cid=1343&newsid=1846286&culture=en-GB&val=638574975359305275