GSK (GSK) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales grew 13% to £7.9 billion, with strong growth in Specialty Medicines (+22%), HIV (+13%), Oncology (more than doubled), and General Medicines (+12%).

• Core operating profit rose 18%-21% to £2.5 billion, and core EPS increased 13%-17% to 43.4p, all excluding COVID-19 solutions.

• Upgraded 2024 guidance: sales growth 7%-9%, core operating profit growth 11%-13%, and core EPS growth 10%-12%.

• Robust R&D progress with 10 major regulatory approvals/submissions and 7 positive phase III results in H1 2024.

• Continued focus on ESG, including new malaria treatment launches and environmental initiatives.

Financial highlights

• Q2 2024 turnover: £7.9bn (+13% CER); core operating profit: £2.5bn (+18% CER); core EPS: 43.4p (+13% CER).

• Core operating margin increased to 31.9% (+1.3ppts YoY); gross profit margin improved to 76.2%.

• Free cash flow for H1 2024 was £617m, with £2.8bn cash generated from operations.

• Net debt reduced by £1.08bn to £13.96bn at 30 June 2024, supported by Haleon stake monetization.

• Dividend for Q2 2024 was 15p per share.

Outlook and guidance

• 2024 group sales expected to increase 7%-9%, core operating profit 11%-13%, and core EPS 10%-12%, all at CER and excluding COVID-19 solutions.

• 2026 outlook: >7% sales growth and >11% core operating profit growth (5-year CAGR); 2031 ambition: sales >£38bn with stable margins.

• Product group guidance: Vaccines + low to mid-single digit %, Specialty Medicines + mid to high teens %, HIV + low double digit %, General Medicines + low to mid-single digit %.

• Guidance reflects strong Specialty and General Medicines offsetting lower Vaccines growth due to revised RSV recommendations in the US.