| GSK delivers strong 2023 performance and upgrades growth outlooks |
| Broad-based performance drives sales, profits and earnings growth: | |
| • | Total 2023 sales £30.3 billion +5% and +14% ex COVID |
| • | Vaccines sales +25%, +24% ex COVID. Shingrix £3.4 billion +17%, Arexvy £1.2 billion |
| • | Specialty Medicines sales -8%, +15% ex COVID with HIV +13%; General Medicines sales +5% |
| • | Total operating profit and Total continuing EPS for 2023 reflects strong growth, with lower charges for contingent consideration liabilities remeasurement |
| • | Adjusted operating profit +12% (with further positive impact of +4% ex COVID) and Adjusted EPS +16% (with further positive impact of +6% ex COVID). This reflected strong sales ex COVID and higher royalty income, partly offset by increased investment in R&D and new product launches |
| (Financial Performance – 2023 results unless otherwise stated, growth % and commentary at CER, ex COVID is excluding COVID-19 solutions as defined on page 53). | |
| 2023 | Q4 2023 | ||||||||||
| £m | % AER | % CER | £m | % AER | % CER | ||||||
| Turnover | 30,328 | 3 | 5 | 8,052 | 9 | 15 | |||||
| Turnover ex COVID | 30,134 | 12 | 14 | 8,032 | 12 | 17 | |||||
| Total operating profit | 6,745 | 5 | 10 | 573 | (69) | (60) | |||||
| Total continuing EPS | 121.6p | 10 | 16 | 8.6p | (77) | (68) | |||||
| Adjusted operating profit | 8,786 | 8 | 12 | 1,752 | 10 | 21 | |||||
| Adjusted operating margin % | 29.0% | 1.2ppts | 1.8ppts | 21.8% | 0.1ppts | 1.2ppts | |||||
| Adjusted EPS | 155.1p | 11 | 16 | 28.9p | 12 | 25 | |||||
| Cash generated from operations | 8,096 | 2 | 3,681 | 75 | |||||||
| Organic R&D delivery and targeted business development supports future growth: | |
| • | 71 Vaccines and Specialty Medicines now in clinical development, including 18 in phase III/registration |
| • | Strong pipeline progress, with 4 major product approvals: Arexvy RSV vaccine; Apretude for HIV prevention; Ojjaara for myelofibrosis and Jemperli in 1L endometrial cancer |
| • | Targeted business development further strengthens the pipeline including: acquisition of Bellus Health and proposed acquisition of Aiolos Bio (Respiratory), licence agreements with Janssen (Infectious Diseases) and Hansoh Pharma (Oncology) |
| • | Significant late-stage R&D milestones expected in 2024, including: approval of Arexvy in 50-59 year-olds; regulatory submission for meningitis (ABCWY) vaccine; phase III data for depemokimab (severe asthma), Nucala (COPD), gepotidacin (UTIs/gonorrhoea), Jemperli (endometrial cancer) |
| 2024 guidance and 2023/2024 dividends: | |
| • | Expect 2024 turnover growth of between 5 to 7%; Adjusted operating growth of between 7 to 10%; Adjusted EPS growth of between 6 to 9% |
| • | Increased dividend of 16p declared for Q4 2023; 58p FY 2023; 60p expected for 2024 |
| Upgrade to longer-term outlooks: | |
| • | 2021-2026 outlook increased to sales more than +7% CAGR and Adjusted operating profit more than +11% CAGR |
| • | 2031 sales outlook increased to more than £38 billion; Adjusted operating margins broadly stable through dolutegravir patent loss of exclusivity |
| Guidance all at CER and excluding COVID-19 solutions |
| Emma Walmsley, Chief Executive Officer, GSK:“GSK delivered excellent performance in 2023, with clear highlights being the exceptional launch of Arexvy and continued progress in our pipeline. We are now planning for at least 12 major launches from 2025, with new Vaccines and Specialty Medicines for infectious diseases, HIV, respiratory and oncology. As a result of this progress and momentum, we expect to deliver another year of meaningful sales and earnings growth in 2024, and we are upgrading our growth outlooks for 2026 and 2031. We remain focused on delivering this potential – and more – to prevent and change the course of disease for millions of people.” |
| The Total results are presented in summary above and on page 8 and Adjusted results reconciliations are presented on pages 20, 21, 23 and 24. 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 18 and £% or AER% growth, CER% growth, turnover excluding COVID-19 solutions and other non-IFRS measures are defined on page 53, COVID-19 solutions are defined on page 53. GSK provides guidance on an Adjusted 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 pages 54 and 55. 2021-2026 CAGR is for 5 years to 2026 with 2021 as the base year. |
| 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. |
| Turnover is expected to increase between 5 to 7 per cent |
| Adjusted operating profit is expected to increase between 7 to 10 per cent |
| Adjusted earnings per share is expected to increase between 6 to 9 per cent |
| This guidance is supported by the following turnover expectations for full-year 2024 at CER: |
| Vaccines | – | expected increase of high single-digit to low double-digit per cent in turnover |
| Specialty Medicines | – | expected increase of low double-digit per cent in turnover |
| General Medicines | – | expected decrease of mid-single-digit per cent in turnover |
| Adjusted Operating profit is expected to grow between 7 to 10 per cent at CER, despite a 6 percentage point impact to Operating Profit growth following the loss of Gardasil royalties effective from the beginning of 2024. GSK expects 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 anticipates further leverage in Operating Profit due to a step down in SG&A growth to a low single-digit increase. R&D is expected to increase broadly in line with sales to support growth of the pipeline.Adjusted Earnings per share is now expected to increase between 6 to 9 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 anticipates, as previously communicated, an increase in the adjusted 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. |
| Additional commentary |
| The Dividend policy and the expected pay-out ratio remain unchanged. Consistent with this, and reflecting strong business performance during the year, GSK now expects to declare an increased dividend of 16p for Q4 2023 and 58p per share for the full year 2023. GSK’s future dividend policy and guidance regarding the expected dividend pay-out in 2024 are provided on page 39. |
| COVID-19 solutions |
| For the full year 2024, GSK does not anticipate any further COVID-19 pandemic-related sales or operating profit. The adverse impact of lower sales of COVID-19 solutions in 2024 is anticipated to be one percentage point of growth in sales and two percentage points in Adjusted operating profit. |
| 2021-26 and 2031 Outlooks |
| In 2021, GSK set out outlooks and ambitions to shareholders, including for a “step-change” in performance. These followed a significant transformation in GSK’s structure, strategy, capital allocation and culture. Since then, GSK has made significant progress, to deliver consecutive quarters of sales and earnings growth, and invest in new Vaccines and Specialty Medicines, to reshape, strengthen and advance its R&D portfolio, post the demerger of Consumer Healthcare. With this progress made, GSK has today announced upgraded outlooks, from those previously given, for the period 2021-2026 and for 2031. For the period 2021-2026, GSK now expects sales to grow more than 7% on a CAGR basis and adjusted operating profit to increase more than 11%, on the same basis. This compares to previous outlooks of more than 5% and more than 10% respectively. Adjusted operating profit margin in 2026 is now expected to be more than 31%.By 2031, GSK now expects to achieve sales of more than £38 billion on a risk-adjusted basis and at CER. This is an increase of £5 billion compared to the estimate given in 2021 and continues to exclude any contributions from early-stage pipeline assets, further anticipated business development and Blenrep. GSK expects to maintain a continued strong focus on margin improvements, while retaining flexibility to invest in future growth. Recognising that GSK will likely face loss of exclusivity for dolutegravir during 2028 to 2030 in US and EU, with the majority of impact 2029 to 2030, GSK has today stated that it expects operating margins to be broadly stable through this period. GSK expects an effective transition within its HIV portfolio towards new long-acting treatment and prevention therapies, margin mix benefit from growth in higher operating margin Vaccine and Specialty Medicine products, and a continued focus on achievable productivity gains, notably in supply chain and in SG&A.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 54. |
| If exchange rates were to hold at the closing rates on 24 January 2024 ($1.27/£1, €1.17/£1 and Yen 188/£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 Adjusted Operating Profit growth for GSK would be -5%. |
| 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 (US EST at 6am) on 31 January 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 | 2023 | Q4 2023 | |||||||||
| £m | GrowthAER% | GrowthCER% | £m | GrowthAER% | GrowthCER% | ||||||
| Shingles | 3,446 | 16 | 17 | 908 | 18 | 23 | |||||
| Meningitis | 1,260 | 13 | 14 | 273 | 20 | 26 | |||||
| RSV (Arexvy) | 1,238 | – | – | 529 | – | – | |||||
| Influenza | 504 | (29) | (29) | 95 | (66) | (64) | |||||
| Established Vaccines | 3,266 | 6 | 7 | 771 | 4 | 8 | |||||
| Vaccines ex COVID | 9,714 | 23 | 24 | 2,576 | 28 | 33 | |||||
| Pandemic vaccines | 150 | >100 | >100 | 7 | (88) | (86) | |||||
| Vaccines | 9,864 | 24 | 25 | 2,583 | 25 | 29 | |||||
| HIV | 6,444 | 12 | 13 | 1,773 | 6 | 10 | |||||
| Respiratory/Immunology and Other | 3,025 | 16 | 18 | 863 | 20 | 25 | |||||
| Oncology | 731 | 21 | 23 | 244 | 55 | 62 | |||||
| Specialty Medicines ex COVID | 10,200 | 14 | 15 | 2,880 | 13 | 17 | |||||
| Xevudy | 44 | (98) | (98) | 13 | (90) | (90) | |||||
| Specialty Medicines | 10,244 | (9) | (8) | 2,893 | 8 | 12 | |||||
| Respiratory | 6,825 | 4 | 6 | 1,746 | 4 | 9 | |||||
| Other General Medicines | 3,395 | (5) | 2 | 830 | (12) | (2) | |||||
| General Medicines | 10,220 | 1 | 5 | 2,576 | (2) | 5 | |||||
| Total | 30,328 | 3 | 5 | 8,052 | 9 | 15 | |||||
| Total ex COVID | 30,134 | 12 | 14 | 8,032 | 12 | 17 | |||||
| By Region: | |||||||||||
| US | 15,820 | 9 | 9 | 4,380 | 21 | 26 | |||||
| Europe | 6,564 | 3 | 2 | 1,657 | – | – | |||||
| International | 7,944 | (6) | 1 | 2,015 | (4) | 6 | |||||
| Total | 30,328 | 3 | 5 | 8,052 | 9 | 15 | |||||
| Turnover ex COVID is excluding COVID-19 solutions and is a non-IFRS measure defined on page 53 with the reconciliation to the IFRS measure Turnover included in the table above. Financial Performance – Q4 2023 results unless otherwise stated, growth % and commentary at CER. |
| 2023 | Q4 2023 | |||||||
| £m | AER | CER | £m | AER | CER | |||
| Vaccines | Total | 9,864 | 24% | 25% | 2,583 | 25% | 29% | |
| Excluding COVID | 9,714 | 23% | 24% | 2,576 | 28% | 33% | ||
| Double-digit growth for Vaccines in the full year and quarter was driven by the successful launch of Arexvy in the US and continued strong uptake of Shingrix in International and Europe. Pandemic vaccines sales mostly include GSK’s share of 2023 contracted European volumes related to a COVID-19 booster vaccine co-developed with Sanofi. |
| Shingles | 3,446 | 16% | 17% | 908 | 18% | 23% |
| Shingrix, a vaccine against herpes zoster (shingles), grew 17% full year and 23% in the quarter on increased demand and favourable pricing, with Q4 2023 representing the highest ever quarter of sales. Growth was driven by public funding expansion and strong private uptake in International and Europe. These regions represented 45% of global turnover, compared to a third in 2022, with Shingrix launched in 39 markets outside of the US, most of which have cumulative immunisation rates below 4%. International sales were driven by launch uptake across several markets, strong momentum and channel inventory build in China due to transition between distributors, and a new public programme in Australia. Sales in Europe included deliveries for the UK National Immunisation Programme which began offering Shingrix vaccination in September. In the US, full year retail demand grew 7% while overall sales declined 4% versus a challenging comparator period in which there was a higher non-retail purchasing. In Q4 2023 US turnover growth of 6% benefitted from planned wholesaler inventory reductions in Q4 2022. The US cumulative immunisation penetration at the end of Q3 2023 reached 35% of the more than 120 million US adults(1) who are currently recommended to receive Shingrix, up 7 percentage points since the same time last year. |
| (1) | United States Census Bureau, International Database, Year 2023. |
| 2023 | Q4 2023 | ||||||
| £m | AER | CER | £m | AER | CER | ||
| Meningitis | 1,260 | 13% | 14% | 273 | 20% | 26% | |
| Full year double-digit Meningitis vaccine sales growth was largely delivered by Bexsero, a vaccine against meningitis B, primarily driven by inclusion in National Immunisation Programmes in Europe. In Q4 2023, Bexsero sales grew in all regions reflecting increased demand and public funding expansion. Menveo, a vaccine against meningitis ACWY, grew full year and in the quarter due to the favourable impact of a US CDC (Center for Disease Control) stockpile borrow in Q3 2022 and replenishment in Q4 2023. Meningitis growth benefitted from the favourable impact of CDC stockpile movements by 6 percentage points in the full year and 14 percentage points in Q4 2023. |
| RSV (Arexvy) | 1,238 | – | – | 529 | – | – |
| Arexvy, the world’s first approved respiratory syncytial virus (RSV) vaccine for older adults, achieved more than £1.2 billion in sales driven by strong uptake and leading market share, delivering an outstanding launch. Almost all sales were in the US where Arexvy is available in all major retail pharmacies with competitive contracting in place. Retailers administered more than 90% of doses, and Arexvy achieved more than two-thirds of the share of retail vaccinations in both the full year and quarter. Approximately 6 million of the 83 million US adults(1) aged 60 and older at risk have been vaccinated with Arexvy. |
| Influenza | 504 | (29%) | (29%) | 95 | (66%) | (64%) |
| Fluarix/FluLaval sales declined in 2023 in line with expectations driven by competitive pressure and lower market demand primarily in the US, where the Q4 2023 sales decrease was also negatively impacted by quarterly supply phasing and RAR adjustments. |
| Established Vaccines | 3,266 | 6% | 7% | 771 | 4% | 8% |
| Full year Established Vaccines growth was driven by Rotarix favourable US CDC stockpile movements, MMR/V vaccines increased supply in International, and Hepatitis vaccine performance related to the travel market recovery. In the quarter, growth was driven by US CDC stockpile replenishment of Infanrix/Pediarix in the US and also MMR/V vaccines increased supply in International. Established Vaccines growth excluding the impact of CDC stockpile movements was 4% in the full year and 6% in Q4 2023. |
| Specialty Medicines | Total | 10,244 | (9%) | (8%) | 2,893 | 8% | 12% | |
| Excluding COVID | 10,200 | 14% | 15% | 2,880 | 13% | 17% |
| Specialty Medicines growth (excluding COVID-19 solutions) of 15% full year and 17% in Q4 2023 reflected continued growth momentum on the HIV portfolio, and growth acceleration in both Oncology and Respiratory/Immunology and Other. COVID-19 solutions negatively impacted growth full year by 23 percentage points and in the quarter by 5 percentage points. |
| HIV | 6,444 | 12% | 13% | 1,773 | 6% | 10% |
| The growth of HIV in Q4 2023 and full year was primarily driven by a 2 percentage point increase in market share within a broadly flat global treatment market, attributable to patient demand for the Oral 2DR (Dovato, Juluca) and Long-Acting medicines (Cabenuva, Apretude). Q4 2023 performance benefitted from continued patient demand, driven by the Oral 2DR and Long-Acting medicines which contributed approximately ten percentage points of growth. Full year growth was driven by patient demand of ten percentage points, with the remainder from favourable pricing dynamics and tender growth. Dovato continues to be the highest selling product in the HIV portfolio with sales of £516 million in the quarter. |
| Oral 2DR and Long Acting | 3,337 | 40% | 40% | 968 | 24% | 28% |
| Oral 2DR (Dovato, Juluca) and Long-Acting medicine (Cabenuva, Apretude) sales growth continues and now represents 55% of the total HIV portfolio compared to 46% for Q4 2022, driven by market share growth of 4 percentage points versus Q4 2022. Long-Acting medicine sales in the quarter were £275 million, growing £133 million versus Q4 2022 and representing 16% of total HIV portfolio. Cabenuva sales in Q4 2023 were £223 million, reflecting strong patient demand, high levels of market access, and reimbursement in the US and EU. |
| Respiratory/Immunology and Other | 3,025 | 16% | 18% | 863 | 20% | 25% |
| This therapy area includes sales of Nucala and Benlysta, and Jesduvroq in the US and Duvroq in Japan for patients with anaemia due to chronic kidney disease. There was consistent and sustained double-digit growth in the full year in both Benlysta and Nucala, with growth acceleration in Q4 2023. |
| (1) | United States Census Bureau, International Database, Year 2023. | |||
| 2023 | Q4 2023 | ||||||
| £m | AER | CER | £m | AER | CER | ||
| Nucala | 1,655 | 16% | 18% | 471 | 19% | 25% | |
| 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). Continued strong growth in all regions in the full year and in the quarter reflected high patient demand in severe eosinophilic asthma, and additionally from increasing sales and growth contributions from the new indications. Growth in Q4 2023 accelerated due to stronger US performance resulting from increasing new patient starts coupled with channel inventory build. |
| Benlysta | 1,349 | 18% | 19% | 389 | 19% | 25% |
| Benlysta, a monoclonal antibody treatment for Lupus, continues to show consistent growth representing strong demand in US and Europe, with bio penetration and volume uptake in certain International markets, particularly in Japan and China. Q4 2023 growth acceleration to 25% driven by US performance coupled with the impacts of channel inventory build, uplifted the full year growth to 19%. |
| Oncology | 731 | 21% | 23% | 244 | 55% | 62% |
| Oncology demonstrated strong growth in the full year and in Q4 2023 driven by Jemperli and Zejula performance, and uptake of Ojjaara post US launch in Q3 2023, partially offset by the impact of Blenrep withdrawal from the US market in November 2022. Growth of Jemperli continued to accelerate in Q4 2023, particularly in the US post approval in Q3 2023 for frontline treatment in combination with chemotherapy for patients with dMMR/MSI-H primary advanced or recurrent endometrial cancer. |
| Zejula | 523 | 13% | 15% | 152 | 22% | 28% |
| Zejula, a PARP inhibitor treatment for ovarian cancer, grew 15% in the full year with strong growth from all regions, with US growth in the first line indication more than offsetting the reduction in use in second line following the update to US prescribing information agreed with the FDA in Q4 2022. Zejula demonstrated strong growth of 28% in Q4 2023, driven by continued US performance and growth following the launch of the tablet formulation, positively impacted by RAR movements, as well as continued positive momentum in Europe and International. |
| General Medicines | 10,220 | 1% | 5% | 2,576 | (2%) | 5% |
| Growth in the full year was driven by both Respiratory and Other General Medicines, with ongoing strong demand for Trelegy in all regions, Anoro in Europe and International, and a continued post pandemic recovery of the antibiotic market in Europe and International regions. |
| Respiratory | 6,825 | 4% | 6% | 1,746 | 4% | 9% |
| Performance in the full year and in Q4 2023 reflected growth of Trelegy and the single inhaled triple therapy class across all regions, and of Anoro in Europe and International. |
| Trelegy | 2,202 | 27% | 29% | 589 | 29% | 35% |
| Trelegy, is the most prescribed single inhaler triple therapy (SITT) treatment worldwide for COPD and asthma. Strong growth in the full year and in Q4 2023 was delivered across all regions, reflecting increased patient demand, growth of the SITT market and penetration of the class. Growth momentum continues, supported by the outputs of recently updated primary care guidelines from the Global Initiative for Chronic Obstructive Lung Disease. Growth in Q4 2023 was positively impacted by favourable RAR adjustments, accounting for 5 percentage points of growth. |
| Seretide/Advair | 1,139 | (2%) | 1% | 276 | (16%) | (12%) |
| Seretide/Advair is an ICS/LABA treatment for asthma and COPD. In the full year 2023, Seretide/Advair sales growth increased 1% primarily reflecting favourable US pricing. However this was offset by generic erosion impacts in Europe and certain International markets. In Q4 2023, sales decreased 12% and reflected continued generic erosion from competitor products in Europe and International. In the US, growth was impacted by unfavourable RAR adjustments and the impact of US of channel inventory reduction ahead of 2024 price changes. |
| Other General Medicines | 3,395 | (5%) | 2% | 830 | (12%) | (2%) |
| Low single digit growth of 2% full year reflected ongoing post pandemic demand for anti-infectives in Europe and International, and certain third party manufacturing arrangements. The decline of 2% in Q4 2023 is adversely impacted by unfavourable RAR adjustments, accounting for 2 percentage points of decline. Overall growth in this product group continues to be impacted by ongoing generic competition. |
By Region
| 2023 | Q4 2023 | |||||||
| £m | AER | CER | £m | AER | CER | |||
| US | Total | 15,820 | 9% | 9% | 4,380 | 21% | 26% | |
| Excluding COVID | 15,810 | 15% | 16% | 4,369 | 21% | 26% | ||
| In the full year 2023, sales growth was adversely impacted by 7 percentage points due to decreased sales of Xevudy, however the decrease in sales had no impact in Q4 2023, as Xevudy sales in 2022 were predominantly realised in the first quarter.Vaccines grew strongly in the full year and in Q4 2023 driven by Arexvy launch uptake and leading market share, partly offset by competition and lower market demand for Influenza vaccines. Growth benefitted from favourable US CDC stockpile movements by 4 percentage points in the full year and in the quarter.Specialty Medicines grew in the full year and in Q4 2023 driven by a strong HIV performance, Benlysta and Nucala continued growth, and strong Oncology growth despite partial offset from the impact of the withdrawal of Blenrep in November 2022.General Medicines growth in Q4 2023 was largely driven by Trelegy from increased patient demand and growth of the SITT market, partially offset by Established Respiratory and Other General Medicines. |
| Europe | Total | 6,564 | 3% | 2% | 1,657 | – | – | |
| Excluding COVID | 6,431 | 10% | 8% | 1,648 | 4% | 4% |
| COVID-19 solutions impacted growth in the full year by 6 percentage points and in the quarter by 4 percentage points. Excluding the impact of COVID-19 solutions, Europe delivered strong growth of 8% in the full year and continued to grow in Q4 2023 by 4%.Vaccines growth reflected Shingrix national immunisation programme initiation in the UK and launch uptake across several markets, together with Bexsero national immunisation campaigns in France and Spain, and ongoing travel vaccine recovery.Specialty Medicines double digit growth in the full year and in the quarter was driven by growth in HIV, Oncology, Benlysta and Nucala including the impact of new indication launches.General Medicines low single digit growth was maintained in the full year, with a low single digit percentage decline in the quarter driven by Established Respiratory performance. |
| International | Total | 7,944 | (6%) | 1% | 2,015 | (4%) | 6% | |
| Excluding COVID | 7,893 | 7% | 15% | 2,015 | 1% | 12% |
| COVID-19 solutions impacted growth in the full year by 14 percentage points and in the quarter by 6 percentage points. Excluding the impact of COVID-19 solutions, International continued to grow in Q4 2023 by 12% and in the full year by 15%, with strong growth across all product groups.The growth in the quarter at AER of 1% compared to growth at CER of 12% was driven by year on year exchange movements Q4 2023 vs Q4 2022 in a number of emerging market countries.Vaccines double digit growth was driven by Shingrix launch uptake across several markets, strong momentum and channel inventory build in China, and a new public programme in Australia. Established and Meningitis vaccines also contributed to the growth.Specialty Medicines grew in HIV, Nucala, Benlysta and Zejula.General Medicines growth was driven by Trelegy and growth across Established Respiratory. Other General Medicines growth was driven by Augmentin on strong post pandemic antibiotic demand. |
| Financial performance |
| Total Results | 2023 | Q4 2023 | |||||||||
| £m | % AER | % CER | £m | % AER | % CER | ||||||
| Turnover | 30,328 | 3 | 5 | 8,052 | 9 | 15 | |||||
| Cost of sales | (8,565) | (10) | (10) | (2,418) | 8 | 10 | |||||
| Selling, general and administration | (9,385) | 12 | 14 | (2,678) | 10 | 16 | |||||
| Research and development | (6,223) | 13 | 14 | (2,047) | 14 | 16 | |||||
| Royalty income | 953 | 26 | 26 | 235 | 14 | 14 | |||||
| Other operating income/(expense) | (363) | (571) | |||||||||
| Operating profit | 6,745 | 5 | 10 | 573 | (69) | (60) | |||||
| Net finance expense | (677) | (16) | (15) | (193) | (21) | (18) | |||||
| Share of after tax profit/(loss) of associates and joint ventures | (5) | (1) | |||||||||
| Profit/(loss) on disposal of interest in associates | 1 | – | |||||||||
| Profit before taxation | 6,064 | 8 | 14 | 379 | (77) | (67) | |||||
| Taxation | (756) | 19 | |||||||||
| Tax rate % | 12.5% | (5.0%) | |||||||||
| Profit after taxation | 5,308 | 8 | 14 | 398 | (76) | (67) | |||||
| Profit attributable to non-controlling interests | 380 | 48 | |||||||||
| Profit attributable to shareholders | 4,928 | 350 | |||||||||
| 5,308 | 8 | 14 | 398 | (76) | (67) | ||||||
| Earnings per share | 121.6p | 10 | 16 | 8.6p | (77) | (68) | |||||
| Financial Performance – Q4 2023 results unless otherwise stated, growth % and commentary at CER. | |||||||||||
| Adjusted resultsReconciliations between Total results and Adjusted results for Q4 2023, Q4 2022, Full Year 2023 and Full Year 2022 are set out on pages 20, 21, 23 and 24. |
| 2023 | Q4 2023 | ||||||||||
| £m | % AER | % CER | £m | % AER | % CER | ||||||
| Turnover | 30,328 | 3 | 5 | 8,052 | 9 | 15 | |||||
| Cost of sales | (7,716) | (12) | (11) | (2,163) | 7 | 8 | |||||
| Selling, general and administration | (9,029) | 11 | 13 | (2,588) | 6 | 12 | |||||
| Research and development | (5,750) | 14 | 14 | (1,784) | 17 | 20 | |||||
| Royalty income | 953 | 26 | 26 | 235 | 14 | 14 | |||||
| Adjusted operating profit | 8,786 | 8 | 12 | 1,752 | 10 | 21 | |||||
| Adjusted profit before taxation | 8,112 | 10 | 15 | 1,560 | 15 | 27 | |||||
| Taxation | (1,257) | 10 | 15 | (235) | 37 | 52 | |||||
| Adjusted profit after taxation | 6,855 | 10 | 15 | 1,325 | 11 | 23 | |||||
| Adjusted profit attributable to non-controlling interests | 572 | 152 | |||||||||
| Adjusted profit attributable to shareholders | 6,283 | 1,173 | |||||||||
| 6,855 | 10 | 15 | 1,325 | 11 | 23 | ||||||
| Earnings per share | 155.1p | 11 | 16 | 28.9p | 12 | 25 | |||||
| 2023 | Q4 2023 | |||||||
| £m | AER | CER | £m | AER | CER | |||
| Cost of sales | Total | 8,565 | (10%) | (10%) | 2,418 | 8% | 10% | |
| % of sales | 28.2% | (4.3%) | (4.6%) | 30.0% | (0.3%) | (1.2%) | ||
| Adjusted | 7,716 | (12%) | (11%) | 2,163 | 7% | 8% | ||
| % of sales | 25.4% | (4.4%) | (4.6%) | 26.9% | (0.7%) | (1.5%) | ||
| Total and Adjusted cost of sales as a percentage of sales decreased in the full year and Q4 2023 primarily reflecting lower sales of lower margin Xevudy compared to 2022. Excluding Xevudy, the full year and the quarter benefitted from an increasing margin contribution from Vaccines sales, particularly the launch of Arexvy in Q3 2023 in the US and Shingrix outside the US. In addition, Specialty Medicines, particularly HIV, contributed to the improved margin, as well as continued operational efficiencies. This was partly offset by adverse inventory provision adjustments in the year as well as inflationary impact on input costs. |
| 2023 | Q4 2023 | |||||||
| £m | AER | CER | £m | AER | CER | |||
| Selling, general & administration | Total | 9,385 | 12% | 14% | 2,678 | 10% | 16% | |
| % of sales | 30.9% | 2.4% | 2.3% | 33.3% | 0.2% | 0.4% | ||
| Adjusted | 9,029 | 11% | 13% | 2,588 | 6% | 12% | ||
| % of sales | 29.8% | 2.1% | 1.9% | 32.1% | (0.9%) | (0.7%) | ||
| Growth in Total and Adjusted SG&A in 2023 primarily reflected increased investment for growth in Vaccines, including disease awareness, launch and global market expansion for Arexvy, and investment behind global market expansion and disease awareness for Shingrix. In Specialty Medicines, increased investment was targeted behind long-acting injectables in HIV and the launch of Ojjaara for myelofibrosis in Oncology. This was partly offset by the continuing benefit of restructuring and tight control of ongoing costs. 2023 also reflected the Zejula royalty dispute in Q1 2023. Total SG&A also included an increase in significant legal costs (see details on page 22). |
| 2023 | Q4 2023 | |||||||
| £m | AER | CER | £m | AER | CER | |||
| Research &development | Total | 6,223 | 13% | 14% | 2,047 | 14% | 16% | |
| % of sales | 20.5% | 1.8% | 1.5% | 25.4% | 1.1% | 0.3% | ||
| Adjusted | 5,750 | 14% | 14% | 1,784 | 17% | 20% | ||
| % of sales | 19.0% | 1.7% | 1.4% | 22.2% | 1.5% | 0.9% | ||
| R&D operating expense growth in 2023 was driven by investment across the portfolio.In the late stage, increased investment in Vaccines was driven by continued acceleration and progression of the pipeline including RSV, pneumococcal, mRNA and therapeutic HSV vaccines.Respiratory/Immunology investment continued in depemokimab in the Phase III programmes in asthma and nasal polyps together with camlipixant a new asset for refractory chronic cough, Nucala in COPD, paediatric Benlysta and CCL 17 in osteo arthritic pain. This was offset by decreased expense in the completion of the clinical programme for otilimab.Infectious Diseases investment in bepirovirsen for treatment of chronic hepatitis B increased to support both monotherapy and combination programmes. Investment in key assets in oncology continued such as Jemperli and Ojjaara but were offset by reduction in the terminated Cell and Gene Therapy programme.In the early-stage, investment increased in IL18 for atopic dermatitis and in the HIV portfolio, focused on next generation long-acting treatments and preventative medicines.In addition to the key drivers for the full year, Q4 2023 also reflected investments for continued acceleration of the portfolio and the newly acquired camlipixant asset, together with the cost of reorganisation of the Research unit.Total R&D included higher impairment charges compared with 2022 and Q4 2022. |
| 2023 | Q4 2023 | |||||||
| £m | AER | CER | £m | AER | CER | |||
| Royalty income | Total | 953 | 26% | 26% | 235 | 14% | 14% | |
| Adjusted | 953 | 26% | 26% | 235 | 14% | 14% | ||
| Growth in Total and Adjusted royalty income in the full year and Q4 2023 primarily related to Gardasil royalties, which were £472 million in 2023 and £80 million in the quarter, as well as Kesimpta and Biktarvy royalties. The overwhelming majority of the income from Gardasil royalties ceased at the end of 2023. |
| 2023 | Q4 2023 | |||||||
| £m | AER | CER | £m | AER | CER | |||
| Other operatingincome/(expense) | Total | (363) | (54%) | (54%) | (571) | >(100%) | >(100%) | |
| The full year other operating expense reflected a charge of £546 million (2022: £1,726 million) arising from the remeasurement of contingent consideration liabilities and the liabilities for the Pfizer put option, and a fair value loss of £17 million (2022: £229 million gain) on the retained stake in Haleon plc (Haleon), partly offset by £200 million (2022: £306 million) of other net income primarily related to equity investments and milestone income (including £49 million dividends received from the retained investment in Haleon). In Q1 2022 upfront income of £0.9 billion was received from the settlement with Gilead Sciences, Inc. (Gilead).In Q4 2023 other operating expense reflected a charge of £430 million (Q4 2022: £3 million gain) arising from the remeasurement of contingent consideration liabilities and the liabilities for the Pfizer, Inc. (Pfizer) put option, and a fair value loss of £172 million (Q4 2022: £606 million gain) on the retained stake in Haleon, partly offset by net income of £31 million (Q4 2022: £135 million) primarily received from equity investments and milestone income. |
| 2023 | Q4 2023 | |||||||
| £m | AER | CER | £m | AER | CER | |||
| Operating profit | Total | 6,745 | 5% | 10% | 573 | (69%) | (60%) | |
| % of sales | 22.2% | 0.3% | 1.0% | 7.1% | (18.2%) | (16.6%) | ||
| Adjusted | 8,786 | 8% | 12% | 1,752 | 10% | 21% | ||
| % of sales | 29.0% | 1.2% | 1.8% | 21.8% | 0.1% | 1.2% | ||
| Total operating profit margin was higher in 2023 due to profitable growth across the portfolio as well as favourable movements in contingent consideration liabilities, partly offset by an unfavourable comparison due to the £0.9 billion upfront income received from the settlement with Gilead in Q1 2022. The quarter is impacted by unfavourable movements in contingent consideration liabilities and fair value losses on the retained stake in Haleon (Q4 2022 fair value gains).2023 and Q4 2023 Adjusted operating profit benefitted from strong sales, favourable product mix and increased royalty income partly offset by increased investment behind product launches and in R&D. The full year also included increased legal charges primarily relating to the Zejula royalty dispute.In 2023 the adverse impact of lower sales of COVID-19 solutions was 4 percentage points of Adjusted operating profit growth, with a reduction in Adjusted operating profit margin of 0.4 percentage points. In the quarter the adverse impact of lower sales of COVID-19 solutions was 5 percentage points of operating profit growth, with minimal impact on Adjusted operating profit margin. |
| 2023 | Q4 2023 | |||||||
| £m | AER | CER | £m | AER | CER | |||
| Adjusted operatingprofit by segment | Commercial Operations | 14,656 | 8% | 10% | 3,612 | 12% | 20% | |
| % of sales | 48.3% | 2.0% | 2.1% | 44.9% | 1.2% | 2.1% | ||
| R&D | (5,607) | 11% | 11% | (1,731) | 14% | 17% | ||
| Commercial Operations Adjusted operating profit in full year and quarter benefitted from strong sales and favourable product mix (with minimal Xevudy sales) and increased royalty income, partly offset by increased investment in growth and launch assets as well as an increase in legal provisions in 2023.The R&D segment operating expenses growth in the full year was driven by progression of the late stage in Vaccines, Respiratory/Immunology and Infectious Diseases. This included pneumococcal and mRNA programmes together with the newly acquired camlipixant and ongoing investment in key programmes such as depemokimab and bepirovirsen. Q4 2023 also reflected investments for continued acceleration of the portfolio, together with the cost of reorganisation of the Research unit. |
| 2023 | Q4 2023 | |||||||
| £m | AER | CER | £m | AER | CER | |||
| Net finance costs | Total | 677 | (16%) | (15%) | 193 | (21%) | (18%) | |
| Adjusted | 669 | (15%) | (15%) | 191 | (19%) | (16%) | ||
| The decrease in net finance costs in the full year and Q4 2023 was mainly driven by the net savings from maturing bonds including the Sterling Notes repurchase in Q4 2022 and higher interest income on cash, partly offset by higher interest on short-term financing. |
| 2023 | Q4 2023 | |||||||
| £m | AER | CER | £m | AER | CER | |||
| Taxation | Total | 756 | 7% | 14% | (19) | >(100%) | (7%) | |
| Tax rate % | 12.5% | (5.0%) | ||||||
| Adjusted | 1,257 | 10% | 15% | 235 | 37% | 52% | ||
| Tax rate % | 15.5% | 15.1% | ||||||
| The full year charge of £756 million represented an effective tax rate on Total results of 12.5% and reflected the different tax effects of the various Adjusting items. |
| 2023 | Q4 2023 | |||||||
| £m | AER | CER | £m | AER | CER | |||
| Non-controllinginterests (“NCIs”) | Total | 380 | (17%) | (17%) | 48 | (62%) | (55%) | |
| Adjusted | 572 | (4%) | (4%) | 152 | 2% | 9% | ||
| The decrease in Total profit from continuing operations allocated to NCIs in the full year was primarily driven by lower ViiV Healthcare profits with an allocation of £374 million (2022: £416 million), as well as lower net profits in some of the Group’s other entities. Q4 2023 was impacted primarily by lower ViiV Healthcare profits with an allocation of £50 million (Q4 2022: £124 million).In the full year, the decrease in Adjusted profit from continuing operations allocated to NCIs reflected lower net profits in some of the Group’s other entities with NCIs, partly offset by higher profits in ViiV Healthcare with an allocation of £566 million (2022: £551 million). The increase in Q4 2023 primarily reflected higher profit allocations from ViiV Healthcare of £154 million (Q4 2022: £148 million), partly offset by lower net profits in some of the Group’s other entities with NCIs. |
| 2023 | Q4 2023 | |||||||
| £p | AER | CER | £p | AER | CER | |||
| Earnings per share | Total continuing | 121.6p | 10% | 16% | 8.6p | (77%) | (68%) | |
| Adjusted | 155.1p | 11% | 16% | 28.9p | 12% | 25% | ||
| Adjusted EPS in the full year and quarter reflected the growth in Adjusted Operating profit as well as lower finance costs. 2023 growth also reflected a favourable benefit from lower non-controlling interests.In 2023 and Q4 2023, lower sales from lower margin COVID-19 solutions reduced Adjusted EPS by six and seven percentage points respectively.In 2023, the increase in Total continuing EPS primarily reflected lower charges related to the remeasurement of contingent consideration liabilities, partly offset by a fair value loss on the retained stake in Haleon compared to a fair value gain in the same period last year. In addition, there is an unfavourable comparison due to upfront income received from the settlement with Gilead in Q1 2022. In Q4 2023, the decrease in Total continuing EPS is driven by higher charges related to the remeasurement of contingent consideration liabilities and a fair value loss on the retained stake in Haleon (Q4 2022 gain). |
| Currency impact on resultsThe results for the 2023 are based on average exchange rates, principally £1/$1.24, £1/€1.15 and £1/Yen 175. The results for Q4 2023 are based on average exchange rates, principally £1/$1.25, £1/€1.15 and £1/Yen 183. The period-end exchange rates were £1/$1.27, £1/€1.15 and £1/Yen 180. Comparative exchange rates are given on page 41. |
| Year to Date | Q4 2023 | |||||||
| £m/£p | AER | CER | £m/£p | AER | CER | |||
| Turnover | 30,328 | 3% | 5% | 8,052 | 9% | 15% | ||
| Earnings per share | Total | 121.6p | 10% | 16% | 8.6p | (77%) | (68%) | |
| Adjusted | 155.1p | 11% | 16% | 28.9p | 12% | 25% | ||
| In 2023 the adverse currency impact primarily reflected weakening of emerging market currencies and the Yen against Sterling and strengthening of Sterling against the US Dollar, partly offset by weakening of Sterling against the Euro. Exchange gains or losses on the settlement of intercompany transactions had a minimal impact on Adjusted EPS.In Q4 2023, the adverse currency impact primarily reflected the strengthening of Sterling against the US Dollar as well as the weakening of emerging market currencies against Sterling. Exchange gains or losses on the settlement of intercompany transactions had a one percentage point favourable impact on Adjusted EPS. |
| Cash generation |
| Cash flow | |||||||
| 2023£m | 2022£m | Q4 2023£m | Q4 2022£m | ||||
| Cash generated from operations attributable to continuing operations (£m) | 8,096 | 7,944 | 3,681 | 2,101 | |||
| Cash generated from operations attributable to discontinued operations (£m) | – | 932 | – | 4 | |||
| Total cash generated from operations (£m) | 8,096 | 8,876 | 3,681 | 2,105 | |||
| Total net cash generated from operating activities (£m) | 6,768 | 7,403 | 3,196 | 1,905 | |||
| Free cash inflow/(outflow) from continuing operations* (£m) | 3,409 | 3,348 | 2,095 | 895 | |||
| Free cash flow from continuing operations growth (%) | 2% | 1% | >100% | (62%) | |||
| Free cash flow conversion from continuing operations* (%) | 69% | 75% | >100% | 60% | |||
| Total net debt** (£m) | 15,040 | 17,197 | 15,040 | 17,197 | |||
| * | Free cash flow from continuing operations and free cash flow conversion are defined on page 53. Free cash flow from continuing operations is analysed on page 44. |
| ** | Net debt is analysed on page 44. |
| 2023Cash generated from operating activities from continuing operations was £8,096 million (2022: £7,944 million). The increase primarily reflected higher adjusted operating profit, a favourable comparison on the timing of net Xevudy related receipts and payments, and lower pension contributions, partly offset by an unfavourable comparison due to the upfront income from the settlement with Gilead received in Q1 2022, increase in trade receivables due to higher sales including the launch of Arexvy, lower payable balances reflecting increased investment in 2022 and higher inventory.Total contingent consideration cash payments in 2023 were £1,145 million (2022: £1,137 million), including cash payments made to Shionogi & Co. Ltd (Shionogi) of £1,106 million (2022: £1,100 million). £1,134 million (2022: £1,058 million) of these were recognised in cash flows from operating activities.Free cash inflow was £3,409 million for 2023 (2022: £3,348 million inflow). In addition to the increase in cash generated from operating activities from continuing operations, the increase in free cash inflow in the full year was driven by lower net interest paid and lower dividends paid to non-controlling interests, partly offset by lower proceeds from the sale of intangible assets.Q4 2023Cash generated from operating activities from continuing operations for the quarter was £3,681 million (Q4 2022: £2,101 million). The increase primarily reflected higher receivables’ collections, driven by the launch of Arexvy in Q3 2023, partly offset by timing of returns and rebates.Total contingent consideration cash payments in the quarter were £285 million (Q4 2022: £273 million), including cash payments made to Shionogi of £272 million (Q4 2022: £257 million). £281 million (Q4 2022: £269 million) of these were recognised in cash flows from operating activities.Free cash inflow was £2,095 million for the quarter (Q4 2022: £895 million inflow). In addition to the increase in cash generated from operating activities from continuing operations, the increase in free cash inflow in the quarter was driven by lower net interest paid and lower dividends paid to non-controlling interests, partly offset by higher tax payments and lower proceeds from the sale of intangible assets.Total Net debtAt 31 December 2023, net debt was £15,040 million, compared with £17,197 million at 31 December 2022, comprising gross debt of £18,018 million and cash and liquid investments of £2,978 million. See net debt information on page 43.Net debt decreased by £2.2 billion primarily due to £3.4 billion free cash inflow, £1.9 billion proceeds from the disposal of investments, including the partial sale of the retained stake in Haleon, and net favourable exchange impacts of £0.6 billion from the translation of non-Sterling denominated debt. These were partly offset by dividends paid to shareholders of £2.2 billion and the net acquisition cost of BELLUS Health Inc. (Bellus) for £1.5 billion.At 31 December 2023, GSK had short-term borrowings (including overdrafts and lease liabilities) repayable within 12 months of £2,813 million with loans of £1,433 million repayable in the subsequent year.On 17 January 2024, GSK completed the sale of 300 million shares in Haleon raising gross proceeds of £978 million. See post balance sheet event note on page 44. |
| Contents | Page |
| Q4 2023 pipeline highlights | 14 |
| ESG | 16 |
| Total and Adjusted results | 18 |
| Income statement | 26 |
| Statement of comprehensive income | 27 |
| Balance sheet | 28 |
| Statement of changes in equity | 29 |
| Cash flow statement | 30 |
| Sales tables | 32 |
| Segment information | 36 |
| Legal matters | 38 |
| Returns to shareholders | 39 |
| Additional information | 40 |
| Net debt information | 43 |
| Post balance sheet event note | 44 |
| Related party transactions | 44 |
| R&D commentary | 45 |
| Reporting definitions | 53 |
| Guidance, assumptions and cautionary statements | 54 |
| 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) | |
| Frances De Franco | +1 215 751 4855 | (Philadelphia) |