GSK (GSK) Q3 2024 earnings summary

Executive summary

• Achieved 9% year-to-date sales growth and 19% core operating profit growth, led by Specialty Medicines, HIV, Respiratory/Immunology, and Oncology, with Q3 sales of £8.0 billion (+2%).

• Specialty Medicines now the largest product area, up 19% in Q3, with double-digit growth in HIV (+12%), Respiratory/Immunology (+14%), and Oncology (+94%).

• Resolved most Zantac litigation with a £1.8 billion charge, reducing legal risk but impacting total operating profit and EPS (-1.4p in Q3).

• Pipeline momentum continues with 67 vaccines and medicines in development, 11 positive phase 3 readouts, and five major product launches planned for 2025.

• Strong cash flow and capital allocation support increased pipeline investment, higher dividends, and business development.

Financial highlights

• Q3 2024 sales reached £8.0 billion (+2% CER), with year-to-date sales up 9%; core operating profit £2.8 billion (+5%), and core EPS 49.7p (+5%).

• Free cash flow for Q3 was £1.3 billion, year-to-date £1.9 billion; cash generated from operations at £5.3 billion.

• Core operating margin improved to 34.5% in Q3 2024, up 100bps year-over-year.

• Dividend per share for Q3 was 15p, with full-year dividend expected at 60p.

• Net debt reduced to £12.8 billion by end of Q3 2024, down from £15.0 billion at year-end.

Outlook and guidance

• 2024 guidance confirmed: 7–9% sales growth, 11–13% core operating profit growth, and 10–12% core EPS growth at CER.

• Product group guidance: Vaccines to decline low single digits, Specialty Medicines to grow high teens, HIV to grow low double digits, General Medicines to grow mid single digits.

• 2021–2026 outlook: sales CAGR >7%, core operating profit CAGR >11%, and 2031 sales target >£38 billion.

• Five major regulatory approvals anticipated in 2025 across key therapeutic areas.

• No further COVID-19 solution sales expected in 2024, with a 1–2 percentage point adverse impact on growth.