GSK : Q1 2023 results announcement

Results Summary	Research and	ESG	Total and	Financial	Auditor's review
development	Adjusted results	information	report

Issued: Wednesday, 26 April 2023, London, U.K.

Press release

First quarter 2023

GSK momentum continues with strong start to 2023

Q1 2023 performance highlights:

• Sales performance reflected lower COVID-19 solutions sales versus Q1 2022. Excluding COVID-19 solutions, sales grew +10% CER with strong performance across Vaccines, Specialty and General Medicines
• Key growth drivers included Shingrix for shingles, meningitis vaccines, oral two-drug regimen and long-acting HIV medicines, Benlysta in immunology, Nucala and Trelegy in respiratory, which combined contributed more than 40% of sales
• Total operating profit and total EPS performance reflected the comparison to Q1 2022 which included the one- off income benefit of the Gilead settlement and higher Xevudy sales
• Adjusted operating profit was stable at CER, predominately reflecting a 5% adverse impact following expected lower COVID-19 solutions sales and 4% from legal provisions primarily relating to royalties
• Adjusted EPS increased +7% CER due to lower non-controlling interests, a lower effective tax rate, and strong sales growth excluding lower COVID-19 solutions (which impacted performance by 7%)
• Cash generated from operations £0.3 billion; free cash outflow (£0.7) billion lower than Q1 2022 primarily due to Gilead settlement income received in Q1 2022 and timing of profit share payments
• Full-year2023 guidance affirmed. Dividend of 14p declared for Q1 2023. 56.5p expected for the full-year 2023

					Q1 2023
	£m		% AER		% CER
Vaccines	2,041	22	15
Specialty Medicines	2,236	(29)	(33)
General Medicines	2,674		12		9
Turnover	6,951		(3)		(8)
Turnover excluding COVID-19 solutions	6,819	16	10
Total operating profit	2,082	(9)	(15)
Total continuing EPS	36.8p	(1)	(8)
Total EPS	36.8p	(18)	(23)
Adjusted operating profit	2,092	8	-
Adjusted operating margin %	30.1%		3.1 ppts		2.5 ppts
Adjusted EPS	37.0p	15	7
Cash generated from operations	287	(88)
Free cash outflow	(689)	>(100)

(Financial Performance - Q1 2023 results unless otherwise stated, growth % and commentary at CER)

R&D delivery and targeted business development support future growth

• Innovative pipeline of 68 vaccines and specialty medicines based on the science of immune system with 17 in Phase III/registration; four anticipated 2023 approvals (daprodustat in anaemia due to chronic kidney disease, RSV older adults vaccine, momelotinib in myelofibrosis and Jemperli in first-line endometrial cancer)
• Four positive phase III/IV data readouts in Q1 2023, including pentavalent Meningitis ABCWY vaccine candidate; gepotidacin for uncomplicated urinary tract infections; Jemperli for first-line endometrial cancer and Cabenuva for HIV treatment
• Proposed acquisition of Bellus Health - provides access to camlipixant, potential best-in-class and highly selective P2X3 antagonist currently in phase III development for treatment of refractory chronic cough; exclusive license agreement signed with Scynexis for Brexafemme, a US FDA approved, first-in-class antifungal for treatment of vulvovaginal candidiasis

Emma Walmsley, Chief Executive Officer, GSK:

"We have made a strong start to 2023, with excellent performance across Vaccines, Specialty and General Medicines. We are very focused on our upcoming launches, including our potential RSV older adult vaccine, and on continuing to strengthen our pipeline - both organically with several positive late-stageread-outs already this year, and through targeted business development. This continued momentum is also supporting our confidence in delivering our medium and long-term growth ambitions."

The Total results are presented in summary above and on page 6 and Adjusted results reconciliations are presented on pages 18 and 19. 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 16 and £% or AER% growth, CER% growth, free cash flow, turnover excluding COVID-19 solutions and other non-IFRS measures are defined on page 44, COVID-19 solutions are defined on page 44. GSK provides guidance on an Adjusted results basis only, for the reasons set out on page 16. All expectations, guidance and targets regarding future performance and dividend payments should be read together with 'Guidance, assumptions and cautionary statements' on pages 45 and 46.

The Q1 2022 comparative results are restated from those previously published to reflect the demerger of Consumer Healthcare in July 2022 see page 33.

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Results Summary	Research and	ESG	Total and	Financial	Auditor's review
development	Adjusted results	information	report

Issued: Wednesday, 26 April 2023, London, U.K.

Press release

First quarter 2023

2023 guidance

The Company affirms its full-year 2023 guidance at constant exchange rates (CER). All expectations and full-year growth rates exclude any contributions from COVID-19 solutions:

Turnover is expected to increase between 6 to 8 per cent

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

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

Taking Q1 2023 performance and the latest expectations for Q2 2023 into account, GSK now expects first half and second half turnover growth to be broadly similar and for General Medicines to be broadly flat to slightly down this year. GSK expects Adjusted operating profit growth to be lower in the first half of 2023 and higher in the second half, relative to full-year expectations.

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

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

Vaccines - expected increase of mid-teens per cent in turnover

Specialty Medicines - expected increase of mid to high single-digit per cent in turnover General Medicines - expected to be broadly flat to slightly down

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

Additional commentary

Dividend policies and expected pay-out ratios remain unchanged for GSK. The future dividend policies and guidance regarding the expected dividend pay-out in 2023 for GSK are provided on page 30.

COVID-19 solutions

In Q1 2023, turnover decreased by 8% at CER reflecting the comparison to Q1 2022, which included £1,307 million of COVID-19 solutions sales in the period. Excluding COVID-19 solutions, turnover increased by 10% at CER. In Q1 2023, Adjusted Operating profit was stable at CER reflecting a 5% adverse impact from expected lower COVID- 19 solutions sales. Based on known binding agreements with governments, GSK does not anticipate further significant COVID-19pandemic-related sales or operating profit in 2023. Consequently, the Company now expects full-year 2023 turnover growth to be impacted by approximately 9%, with Adjusted Operating profit growth being reduced between 5% to 6% versus the prior year.

All expectations, guidance and targets regarding future performance and dividend payments should be read together with 'Guidance, assumptions and cautionary statements' on pages 45 and 46. If exchange rates were to hold at the closing rates on 31 March 2023 ($1.24/£1, €1.14/£1 and Yen 165/£1) for the rest of 2023, the estimated impact on 2023 Sterling turnover growth for GSK would be stable and if exchange gains or losses were recognised at the same level as in 2022, the estimated impact on 2023 Sterling Adjusted Operating Profit growth for GSK would be -1%.

Results presentation

A conference call and webcast for investors and analysts of the quarterly results will be hosted by Emma Walmsley, CEO, at 12pm GMT on 26 April 2023. 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.

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Results Summary	Research and	ESG	Total and	Financial		Auditor's review
development	Adjusted results	information			report
Issued: Wednesday, 26 April 2023, London, U.K.
Press release
First quarter 2023
Performance: turnover
Turnover									Q1 2023
							Growth		Growth
				£m			£%		CER%
Shingles				833			19	11
Meningitis				280			32	25
Influenza				12			(33)	(28)
Established Vaccines				815			10		4
Vaccines excluding COVID-19 solutions			1,940			16	9
COVID-19 solutions: Pandemic vaccines			101			100		100
Vaccines				2,041			22	15
HIV				1,468			24	15
Immunology/Respiratory and Other			601			16	9
Oncology				136			7		2
Specialty Medicines excluding COVID-19 solutions		2,205			21	13
COVID-19 solutions: Xevudy			31			(98)		(98)
Specialty Medicines				2,236			(29)	(33)
Respiratory				1,767			15	10
Other General Medicines			907			7		7
General Medicines				2,674			12		9
Total				6,951			(3)		(8)
Total excluding COVID-19 solutions			6,819			16	10
By Region:
US				3,270			(9)	(17)
Europe				1,704			3	(2)
International				1,977			2		2
Total				6,951			(3)		(8)

Turnover excluding COVID-19 solutions is a non-IFRS measure defined on page 44 with the reconciliation to the IFRS measure Turnover included in the table above.

			£m	AER	CER
Vaccines	Total	Q1 23	2,041	22%	15%
Excluding COVID-19 solutions	Q1 23	1,940	16%	9%

Vaccines grew in all regions. Key growth drivers were geographical expansion and market growth for Shingrix, and inclusion in National Immunisation Programmes for Bexsero. Pandemic vaccines sales reflected GSK's share of 2023 contracted European volumes related to a COVID-19 booster vaccine co-developed with Sanofi.

Shingles

Q1 23

833

19%

11%

Shingrix, a vaccine against herpes zoster (shingles), grew in International and Europe reflecting new launch uptake, demand and favourable pricing mix. US sales were primarily impacted by unfavourable wholesaler and distributor inventory movements. Shingrix is now available in 31 countries.

Meningitis

Q1 23

280

32%

25%

Strong growth in Meningitis vaccines was primarily driven by Bexsero, our vaccine against meningitis B, which grew in Europe mainly from inclusion in National Immunisation Programmes and in International due to an increase in demand ahead of an anticipated price increase. Menveo, our vaccine against meningitis strains ACWY, grew in the US primarily due to initial public stocking of the new liquid formulation and Center for Disease Control (CDC) purchasing patterns.

Established Vaccines

Q1 23

815

10%

4%

Established Vaccines grew mainly in Hepatitis vaccines resulting from continued travel market recovery in Europe and International, and due to CDC purchasing patterns in the US. Rotarix, a vaccine to protect infants against rotavirus, grew in the US primarily driven by initial stocking of the new liquid formulation by the CDC. Synflorix, our 10-valent vaccine for pneumococcal disease, declined in the quarter reflecting phasing of public market supply and lower demand related to decreased birth cohorts in International.

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Results Summary	Research and	ESG	Total and	Financial	Auditor's review
development	Adjusted results	information	report

Issued: Wednesday, 26 April 2023, London, U.K.

Press release

First quarter 2023

			£m	AER	CER
Specialty	Total	Q1 23	2,236	(29%)	(33%)
Medicines	Excluding COVID-19 solutions	Q1 23	2,205	21%	13%

Specialty Medicines growth reflected consistent performance, with HIV, Oncology and Immunology/Respiratory and Other all growing. In the quarter, there were minimal sales of Xevudy contrasting with strong sales in Q1 2022, resulting in a drag of 46 (CER) percentage points.

HIV

Q1 23

1,468

24%

15%

The performance of HIV benefited from strong patient demand for Oral two-drug regimen (Oral 2DR) and Long Acting medicines which contributed approximately two-thirds of the growth. US pricing favourability contributed approximately one-third of growth, in part driven by favourable prior period Returns and Rebates (RAR) adjustments in Q1 2023. The inventory build in Q4 2022 has been slow to deplete, with less than one-third reducing in this quarter, the remainder is expected to reduce by the half year.

Oral 2DR and Long Acting

Q1 23

697

62%

51%

Oral 2DR (Dovato, Juluca) and Long Acting medicines (Cabenuva, Apretude) sales represented 47% of the total HIV portfolio compared to 36% in Q1 2022. Growth was primarily driven by sales of Dovato and Cabenuva.

Immunology/Respiratory and Other

Q1 23

601

16%

9%

This therapy area includes sales of Benlysta and Nucala, and also sales of Duvroq (Daprodustat) in Japan. Daprodustat launch in US is expected in the second half of the year.

Benlysta

Q1 23

253

18%

9%

Benlysta, a monoclonal antibody treatment for Lupus, continues to show consistent growth representing strong underlying demand in US and Europe. This growth was partially offset in the quarter by the impact of wholesaler inventory movements in US and International regions.

Nucala

Q1 23

347

18%

11%

Nucala, is a 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). Growth in the quarter reflected patient demand in severe eosinophilic asthma and for the new indications with ongoing launches. This growth was partially offset in the US by the impact of inventory depletion and an unfavourable prior period RAR adjustment.

Oncology

Q1 23

136

7%

2%

Oncology growth was driven by Zejula in Europe and Jemperli in US and Europe. Blenrep growth in Europe was offset by the impact of withdrawal from the US market in November 2022.

Zejula

Q1 23

114

16%

10%

Growth of Zejula, a PARP inhibitor treatment for ovarian cancer, was driven by Europe and International markets. In the US, first line indication growth was more than offset by reduction in use in second line following the update to US prescribing information agreed with the FDA in Q4 2022.

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Results Summary	Research and	ESG	Total and	Financial		Auditor's review
development	Adjusted results	information		report
Issued: Wednesday, 26 April 2023, London, U.K.
Press release
First quarter 2023
				£m	AER	CER
General Medicines			Q1 23	2,674	12%	9%

Growth driven by both Respiratory and Other General Medicines categories, driven by ongoing demand for Trelegy in all regions in addition to a strong allergy season in Japan and continued post pandemic recovery of the antibiotic market in Europe and International regions.

Respiratory

Q1 23

1,767

15%

10%

Performance reflects strong growth of Trelegy and the single inhaled triple therapy class across all regions. Growth also includes the benefits of a strong allergy season in Japan and the US launch of Flovent authorised generic in Q2 2022. Favourable US prior period RAR adjustments to Seretide/Advair were offset by adverse adjustments to Relvar/Breo in the quarter.

Trelegy

Q1 23

465

37%

28%

Trelegy, is the most prescribed single inhaler triple therapy (SITT) treatment for COPD and asthma. Trelegy grew in the period with strong performance across all regions, reflecting increased patient demand and growth of the SITT market.

Seretide/Advair

Q1 23

339

12%

8%

Seretide/Advair is an ICS/LABA treatment for asthma and COPD. Growth reflected targeted promotion in certain International markets and the benefit of a favourable US prior period RAR adjustment, partially offset by the impact of generic competition in Europe, US and certain International markets.

Other General Medicines

Q1 23

907

7%

7%

High single-digit growth reflected strong post pandemic demand for anti-infectives in Europe and International, with Augmentin growth of 37% AER, 38% CER in the quarter. The impact of ongoing generic competition in this product group is also offset by Avodart and dermatological product growth, predominantly in the International region.

By Region

			£m	AER	CER
US	Total	Q1 23	3,270	(9%)	(17%)
	Excluding COVID-19 solutions	Q1 23	3,270	16%	6%

In the quarter there was a 23 (CER) percentage point drag due to high sales of Xevudy in Q1 2022, with no COVID-19 solutions sales in Q1 2023. Excluding this effect there was growth in all product groups. Vaccines grew on Established Vaccine market recovery and CDC order phasing, offsetting impact of wholesaler destocking and a strong Q1 2022 comparator on Shingrix growth. Specialty Medicines growth was driven by strong HIV performance. General Medicines growth was driven by ongoing performance of Trelegy within the single inhaled triple therapy class.

			£m	AER	CER
Europe	Total	Q1 23	1,704	3%	(2%)
Excluding COVID-19 solutions	Q1 23	1,603	19%	14%

In the quarter there was a 16 (CER) percentage point drag due to high sales of Xevudy in Q1 2022, with all product groups growing strongly excluding this effect. Vaccines double digit growth reflected Shingrix launches and uptake, Bexsero national immunisation campaigns in France and Spain and ongoing travel vaccine recovery. Specialty Medicines double digit growth was driven by HIV, Benlysta and Nucala including the impact of new indication launches. General Medicines was driven by Trelegy ongoing growth and Augmentin on strong post pandemic antibiotic demand.

			£m	AER	CER
International	Total	Q1 23	1,977	2%	2%
Excluding COVID-19 solutions	Q1 23	1,946	13%	14%

In the quarter there was a 12 (CER) percentage point drag due to high sales of Xevudy in Q1 2022, with all product groups growing strongly excluding this effect. Vaccines double digit growth was driven by Shingrix uptake in Japan and China and launches in certain other markets. Specialty Medicines grew in HIV, Oncology and Immunology/Respiratory and Other with Nucala delivering strong growth in severe eosinophilic asthma and new indications. General Medicines product group was driven by Respiratory, with Trelegy growth and a strong allergy season in Japan, Other General Medicines was driven by Augmentin on strong post pandemic antibiotic demand.

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