| Issued: Wednesday, 1 February 2023, London U.K. |
| GSK delivers strong 2022 performance with full year sales of £29.3 billion +19% AER, +13% CER; Total EPS 371.4p >100% Adjusted EPS of 139.7p +27% AER, +15% CER from continuing operations |
|
| |
| Highlights | |
| | |
| Step change in commercial execution drives strong sales growth across Specialty Medicines and Vaccines | |
| · | Sales of £29.3 billion +19% AER, +13% CER. Sales +15% AER, +10% CER excluding COVID-19 solutions |
| · | Specialty Medicines £11.3 billion +37% AER, +29% CER; HIV +20% AER, +12% CER; Oncology +23% AER, +17% CER; Immuno-inflammation and other specialty +29% AER +20% CER; COVID-19 solutions (Xevudy) sales £2.3 billion |
| · | Vaccines £7.9 billion +17% AER, +11% CER; Shingrix £3 billion +72% AER, +60% CER |
| · | General Medicines £10.1 billion +5% AER, +1% CER |
|
| |
| Prioritised investment and cost discipline support strong growth in operating profit and EPS | |
| · | Total continuing operating margin 21.9%. Total EPS 371.4p > 100% primarily reflecting the gain from discontinued operations arising on the demerger of the Consumer Healthcare business. Total continuing EPS 110.8p +34% AER, +18% CER |
| · | Adjusted operating margin 27.8%. Adjusted operating profit growth +26% AER, +14% CER. This included a decline in growth from COVID-19 solutions of approximately 3% AER and CER |
| · | Adjusted EPS 139.7p +27% AER, +15% CER. This included a decline in growth from COVID-19 solutions of approximately 4% AER, 3% CER |
| · | Full-year 2022 cash generated from operations attributable to continuing operations £7.9 billion. Full-year free cash flow £3.3 billion |
|
|
|
| R&D delivery and business development supports future growth | |
| · | Innovative pipeline of 69 vaccines and specialty medicines based on science of the immune system, with 18 in phase III/registration |
| · | Potential best in class RSV older adults candidate vaccine filed in US, EU, Japan; Shingrix interim 10-year data presented at ID Week 2022; acquisition of Affinivax completed, including phase II next-generation vaccine for pneumococcal disease and use of innovative MAPs technology |
| · | Continued progress in development of long-acting HIV treatments; positive phase II data on N6LS broadly-neutralising antibody presented at HIV Glasgow |
| · | Pivotal phase III trials for gepotidacin antibiotic for uncomplicated UTIs stopped early for efficacy; positive phase IIb data for bepirovirsen, potential functional cure for chronic hepatitis B; exclusive licence agreement with Spero Therapeutics for tebipenem Hbr, late-stage antibiotic for complicated UTIs |
| · | Expansion of depemokimab phase III programme with trials for long-acting IL-5 inhibitor in three additional eosinophil-driven diseases |
| · | 4 approvals anticipated in 2023: RSV OA vaccine (US, EU, JP); Jemperli in 1L endometrial cancer (US); momelotinib in myelofibrosis (US) and daprodustat in chronic kidney disease (US, EU) |
|
| |
| Confident in outlooks for turnover and Adjusted operating profit growth | |
| · | 2023 Turnover expected to increase between 6% to 8%; Adjusted operating profit expected to increase between 10% to 12%; EPS expected to increase between 12% to 15% |
| · | 2023 Guidance at CER and excludes any contribution from COVID-19 solutions |
| · | 13.75p dividend declared for the Q4 2022. No change to expected dividend from GSK of 56.5p/share for 2023 |
| | |
| Emma Walmsley, Chief Executive Officer, GSK: "2022 was a landmark year for GSK delivering the step change in performance we committed to, driven by strong growth in specialty medicines and vaccines, including record sales for Shingrix. We enter 2023 with good momentum, underpinning confidence in our ambitious sales and profit outlooks for 2026. At the same time, we continue to build a stronger portfolio and pipeline based on infectious diseases and the science of the immune system, including our potential new RSV vaccine. This momentum, together with further targeted business development, means GSK will also be in a strong position to deliver growth from 2026 onwards." |
| The Total results are presented in summary on page 2 and under 'Financial performance' on pages 9 and 22 and Adjusted results reconciliations are presented on pages 18, 19, 31 and 32. 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 39 and £% or AER% growth, CER% growth, free cash flow and other non-IFRS measures are defined on page 67, COVID-19 solutions are also defined on page 67. GSK provides guidance on an Adjusted results basis only, for the reasons set out on page 39. All expectations, guidance and targets regarding future performance and dividend payments should be read together with 'Guidance, assumptions and cautionary statements' on pages 68 and 69. |
| 2022 results | |||||||||||
| |
| | | | 2022 | |
| | | | Q4 2022 |
| | £m | | Growth £% | | Growth CER% | | £m | | Growth £% | | Growth CER% |
| | | | | | | | | | | | |
| Turnover | 29,324 | | 19 | | 13 | | 7,376 | | 4 | | (3) |
| |
| | | | | |
| | | | |
| Total continuing operating profit* | 6,433 | | 48 | | 31 | | 1,868 | | >100 | | >100 |
| Total EPS | 371.4p | | >100 | | >100 | | 37.1p | | 98 | | 75 |
| Total continuing EPS | 110.8p | | 34 | | 18 | | 37.2p | | >100 | | >100 |
| Total discontinued EPS* | 260.6p | | >100 | | >100 | | (0.1)p | | >(100) | | >(100) |
| |
| | | | | |
| | | | |
| Adjusted operating profit | 8,151 | | 26 | | 14 | | 1,595 | | 21 | | 5 |
| Adjusted EPS | 139.7p | | 27 | | 15 | | 25.8p | | 10 | | (6) |
| |
| | | | | |
| | | | |
| Cash generated from operations attributable to continuing operations | 7,944 | | 10 | | | | 2,101 | | (37) | | |
| Free cash flow | 3,348 | | 1 | | | | 895 | | (62) | | |
| | | | | | | | | | | | |
| * | The amounts presented in the table above for continuing operations and Adjusted results excludes the Consumer Healthcare business discontinued operation. The amounts presented for discontinued EPS are for the demerger of the Consumer Healthcare business. The presentation of continuing and discontinued operations under IFRS 5 are set out on page 52. |
| 2023 guidance |
| The company provides 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 |
| Due to the phasing of quarterly results in 2022 and the resulting comparators, GSK expects turnover and Adjusted operating profit growth to be slightly lower in the first half of 2023 including a challenging comparator in Q1 2022 and somewhat 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: |
| Specialty Medicines - Expected increase of mid to high single-digit per cent in turnover |
| Vaccines - Expected increase of mid-teens per cent in turnover |
| General Medicines - Expected slight decrease in turnover |
| 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 37.
COVID-19 solutions Based on known binding agreements with governments, GSK does not anticipate any significant COVID-19 pandemic-related sales or operating profit in 2023. Sales of COVID-19 solutions were £2.4 billion in 2022 and therefore we expect a reduction in Turnover growth by approximately 9% and a reduction in Adjusted Operating profit growth by 6% to 7%. However, the Company continues to discuss future opportunities to support governments, healthcare systems, and patients whereby its COVID-19 solutions can address the emergence of any new COVID-19 variant of concern. |
| All expectations, guidance and targets regarding future performance and dividend payments should be read together with 'Guidance, assumptions and cautionary statements' on pages 68 and 69. If exchange rates were to hold at the closing rates on 27 January 2023 ($1.24/£1, €1.14/£1 and Yen 161/£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 also be stable. |
| Demerger of Consumer Healthcare |
| On 18 July 2022, GSK plc separated its Consumer Healthcare business from the GSK Group to form Haleon, an independent listed company. The separation was effected by way of a demerger of 80.1% of GSK's 68% holding in the Consumer Healthcare business to GSK shareholders. Following the demerger, 54.5% of Haleon was held in aggregate by GSK Shareholders, 6.0% remains held by GSK (including shares received by GSK's consolidated ESOP trusts) and 7.5% remains held by certain Scottish Limited Partnerships (SLPs) set up to provide collateral for a funding mechanism pursuant to which GSK will provide additional funding for its UK defined benefit Pension Schemes. The aggregate ownership by GSK (including ownership by the ESOP trusts and SLPs) after the demerger of 13.5% is measured at fair value with changes through profit and loss.
The gain on the demerger for the distributed stake was £7.7 billion which was recognised in the full-year. The asset distributed was the 54.5% ownership of the Consumer Healthcare business. The net assets derecognised reflected Consumer Healthcare transactions up to 18 July 2022 which included pre-separation dividends declared and settled before 18 July 2022. Those dividends included: £10.4 billion (£7.1 billion attributable to GSK) of dividends funded by Consumer Healthcare debt that was partially on-lent during Q1 2022 and dividends of £0.6 billion (£0.4 billion attributable to GSK) from available cash balances. GSK's share of the pre-separation dividends funded by debt resulted in a reduction of net debt for GSK on demerger. The gain on the demerger arising from remeasurement of the retained stake was £2.4 billion which was recognised in the full-year.
The total gain on the demerger of the Consumer Healthcare business for the full-year was £10.1 billion. In addition, the Profit after taxation from discontinued operations for the Consumer Healthcare business from 1 January to 18 July 2022 was £0.6 billion which increased the Total profit after tax of discontinued operations in the full-year to £10.7 billion. Following finalisation of the demerger accounting, an adjustment of £0.5 billion to increase the gain on the demerger of Consumer Healthcare as disclosed in Q3 2022 from £9.6 billion to £10.1 billion for the full-year has been recorded retrospectively within the Q3 2022 results. See page 55 for further details on the demerger of Consumer Healthcare. |
| 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 on 1 February 2023. Presentation materials will be published on www.gsk.com prior to the webcast and a transcript of the webcast will be published subsequently.
Information available on GSK's website does not form part of, and is not incorporated by reference into, this Results Announcement. |
| Operating performance summary |
| The amounts below are from continuing operations unless otherwise specified. |
| Turnover | 2022 |
| Q4 2022 | ||||||||
| | | | | | | | | | | | |
| | £m | | Growth £% | | Growth CER% | | £m | | Growth £% | | Growth CER% |
| | | | | | | | | | | | |
| Specialty Medicines | 11,269 | | 37 | | 29 | | 2,681 | | (3) | | (11) |
| Vaccines | 7,937 | | 17 | | 11 | | 2,074 | | 15 | | 7 |
| General Medicines | 10,118 | | 5 | | 1 | | 2,621 | | 5 | | - |
| | | | | | | | | | | | |
| Commercial Operations | 29,324 | | 19 | | 13 | | 7,376 | | 4 | | (3) |
| | | | | | | | | | | | |
| Turnover growth in 2022 reflected strong performance in all three product groups. Turnover growth in Q4 2022 was impacted by an unfavourable comparator due to strong sales of COVID-19 solutions in Q4 2021. Turnover grew 16% at AER, 10% at CER in 2022 and 17% at AER, 9% at CER in Q4 2022 excluding COVID-19 solutions sales. Specialty Medicines included £2,309 million sales of Xevudy, and double-digit growth of all therapy areas in 2022. Specialty Medicines also saw double digit growth of all therapy areas in Q4 2022 excluding COVID-19 solutions.
Specialty Medicines Specialty Medicines growth in 2022 was driven by consistent growth in all therapy areas. Total Specialty Medicines sales in the quarter were £2,681 million down 3% at AER, 11% at CER reflecting strong Xevudy sales in Q4 2021. Specialty Medicines, excluding sales of Xevudy, were £8,960 million up 23% at AER, 15% at CER in 2022 and £2,556 million, up 32% at AER, 21% at CER in Q4 2022.
Vaccines Vaccines growth in 2022 and in Q4 2022 reflected strong Shingrix performance, partially offset by higher pandemic adjuvant sales in 2021. Vaccines grew 24% at AER, 17% at CER in 2022 and 17% at AER, 9% at CER in Q4 2022, excluding pandemic adjuvant sales.
General Medicines In 2022, General Medicines reflected the post pandemic recovery of the antibiotics market and strong performance of Trelegy in respiratory across all regions. During Q4 2022 the impact of generic competition in US and other markets was offset by Trelegy growth in respiratory and the recovery of the antibiotic market.
Operating profit
2022 Total operating profit from continuing operations was £6,433 million compared with £4,357 million in 2021. This included the £0.9 billion upfront income received from the settlement with Gilead Sciences, Inc. (Gilead) increased profits on turnover growth of 13% at CER and fair value gains on investments, partly offset by higher remeasurement charges for contingent consideration liabilities. Adjusted operating profit was £8,151 million, 26% higher at AER and 14% at CER than 2021. The Adjusted operating margin of 27.8% was 1.5 percentage points higher at AER and 0.3 percentage points higher at CER compared to 2021. This primarily reflected the impact from low margin COVID-19 solutions sales (Xevudy). This was offset by operating leverage from strong sales growth, mix benefit, lower inventory adjustments and write offs and higher royalty income.
Q4 2022 Total operating profit from continuing operations was £1,868 million compared with £492 million in Q4 2021. The increase primarily reflected fair value gains on investments, milestone income from disposals and lower remeasurement charges for contingent consideration liabilities. Adjusted operating profit was £1,595 million, 21% higher at AER and 5% at CER than Q4 2021. The Adjusted operating margin of 21.6% was higher by 3.0 percentage points at AER and 1.5 percentage points at CER than in Q4 2021. This reflected the impact from lower sales of COVID-19 solutions, lower inventory adjustments and write offs in Vaccines as well as a favourable mix and higher royalty income. This was partly offset by increased launch investment in SG&A in Specialty Medicines.
Earnings per share
2022 Total EPS from continuing operations was 110.8p compared with 82.9p in 2021. This primarily reflected the £0.9 billion upfront income received from the settlement with Gilead, increased profits from turnover growth and fair value gains on investments, partly offset by higher remeasurement charges for contingent consideration liabilities and an unfavourable comparison due to a credit of £430 million to Taxation in 2021.
Adjusted EPS from continuing operations was 139.7p compared with 110.3p in 2021. Operating leverage from strong sales growth, beneficial mix and lower inventory adjustments and write-offs, higher royalty income and a lower effective tax rate was partly offset by increased investment behind launches, higher supply chain, freight and distribution costs and higher non-controlling interests.
Q4 2022 Total EPS from continuing operations was 37.2p compared with 10.6p in Q4 2021. This primarily reflected higher fair value gains on investments and lower remeasurement charges for contingent consideration liabilities.
Adjusted EPS from continuing operations was 25.8p compared with 23.6p in Q4 2021. The reduction primarily reflected the impact from lower sales of COVID-19 solutions low margin Xevudy and pandemic adjuvant, higher interest costs and a higher effective tax rate compared to Q4 2021.
Cash flow
2022 Cash generated from operations attributable to continuing operations for the year was £7,944 million (2021: £7,249 million). The increase primarily reflected a significant increase in operating profit, favourable exchange impact and favourable timing of collections, partly offset by unfavourable timing of profit share payments for Xevudy sales, increased cash contributions to the UK defined benefit pension schemes, increased contingent consideration payments and a higher increase in inventory. Cash generated from operations attributable to discontinued operations for the full year was £932 million (2021: £1,994 million). Net debt reduced by £2,641 million, partly due to £7,112 million received from demerger dividends and £3,108 million paid for the acquisitions of Sierra Oncology, Inc (Sierra) and Affinivax Inc. (Affinivax).
Q4 2022 Cash generated from operations attributable to continuing operations for the quarter was £2,101 million (Q4 2021: £3,329 million). The decrease primarily reflected unfavourable timing of profit share payments for Xevudy, increased cash contributions to the UK defined benefit pension schemes and unfavourable timing of returns and rebates partly offset by an increase in operating profit. Cash generated from operations attributable to discontinued operations for the quarter was £4 million (Q4 2021: £872 million).
Profit/(loss) and earnings per share from discontinued operations
2022 Profit after taxation from discontinued operations amounted to £10,700 million (2021: £1,580 million). This includes £10,084 million for the gain arising on the demerger of Consumer Healthcare split between the amount distributed to shareholders on demerger of £7,651 million and profit after taxation on discontinued operations for the retained stake of £2,433 million. In addition, the Profit after taxation from discontinued operations for the Consumer Healthcare business was £621 million (2021: £1,580 million).
EPS from discontinued operations was 260.6p, compared with 26.7p in 2021. The increase primarily reflected the gain arising on the demerger of Consumer Healthcare recognised in Profit after taxation for discontinued operations.
Q4 2022 The loss after taxation from discontinued operations amounted to £5 million (Q4 2021: profit of £510 million).
Loss per share from discontinued operations was (0.1)p compared with EPS of 8.1p in Q4 2021.
Total earnings per share
2022 Total EPS was 371.4p compared with 109.6p in 2021. The increase primarily reflected the profit after taxation for discontinued operations recognised on the Consumer Healthcare business demerger, upfront income received from the settlement with Gilead, increased profits and fair value gains on investments, partly offset by higher remeasurement charges for contingent consideration liabilities and an unfavourable comparison due to a credit of £397 million to Taxation in 2021.
Q4 2022 Total EPS was 37.1p compared with 18.7p in Q4 2021. The increase primarily reflected higher fair value gains on investments and lower remeasurement charges for contingent consideration liabilities. |
| Q4 2022 pipeline highlights (since 2 November 2022) |
|
| Medicine/vaccine | Trial (indication, presentation) | Event |
| Regulatory approvals or other regulatory action | Rotarix | Rotavirus, liquid formulation | Regulatory approval (US) |
| VidPrevtyn Beta (Sanofi) | COVID-19 | Regulatory approval (EU) | |
| Triumeq | HIV (paediatric) | Positive CHMP opinion (EU) | |
| Regulatory submissions or acceptances | momelotinib | MOMENTUM (myelofibrosis with anaemia) | Regulatory acceptance (EU) |
| cabotegravir | Pre-exposure prophylaxis, long-acting injectable | Regulatory submission (CN) | |
| Phase III data readouts or other significant events | Blenrep | DREAMM-3 (3L+ multiple myeloma) | Phase III data readout, did not meet primary endpoint |
| Jemperli | RUBY (1L endometrial cancer) | Positive phase III data readout (interim analysis) | |
| gepotidacin | EAGLE (uncomplicated urinary tract infection) | Positive phase III data readout (interim analysis) | |
| GSK3036656 (leucyl t-RNA inhibitor) | Tuberculosis | Positive phase IIa data readout | |
| Benlysta | Systemic sclerosis | Orphan Drug Designation granted (US) |
| Anticipated news flow |
| Timing | Medicine/vaccine | Trial (indication, presentation) | Event |
| H1 2023 | bepirovirsen | B-Together (hepatitis B virus) | Phase IIb data readout |
| daprodustat | ASCEND (anaemia of chronic kidney disease) | Regulatory decision (US, EU) | |
| Nucala | Severe asthma | Regulatory submission (CN) | |
| momelotinib | MOMENTUM (myelofibrosis with anaemia) | Regulatory decision (US) | |
| Jemperli | RUBY (1L endometrial cancer) | Regulatory submission (US, EU) | |
| gepotidacin | EAGLE (uncomplicated urinary tract infection) | Regulatory submission (US) | |
| MenABCWY (gen 1) vaccine candidate | Meningitis ABCWY | Phase III data readout | |
| RSV older adult vaccine candidate | RSV, older adults aged 60+ years | Regulatory decision (US) | |
| Shingrix | Shingles, at-risk adults aged 18+ years | Regulatory decision (JP) | |
| SKYCovione COVID-19 vaccine | COVID-19 | Regulatory decision (EU) | |
| H2 2023 | Nucala | Nasal polyposis | Regulatory submission (CN, JP) |
| Blenrep | DREAMM-8 (2L+ multiple myeloma) | Phase III data readout | |
| Blenrep | DREAMM-7 (2L+ multiple myeloma) | Phase III data readout | |
| Blenrep | DREAMM-8 (2L+ multiple myeloma) | Regulatory submission (US, EU) | |
| Blenrep | DREAMM-7 (2L+ multiple myeloma) | Regulatory submission (US, EU) | |
| Jemperli | RUBY (1L endometrial cancer) | Regulatory decision (US) | |
| Zejula | FIRST (1L maintenance ovarian cancer) | Phase III data readout | |
| cabotegravir | Pre-exposure prophylaxis, long-acting injectable | Regulatory decision (EU) | |
| Vocabria | HIV | Regulatory decision (CN) | |
| gepotidacin | EAGLE (urogenital gonorrhoea) | Phase III data readout | |
| gepotidacin | EAGLE (uncomplicated urinary tract infection) | Regulatory submission (EU) | |
| MenABCWY (gen 1) vaccine candidate | Meningitis ABCWY | Regulatory submission (US) | |
| MenABCWY (gen 2) vaccine candidate | Meningitis ABCWY | Phase II data readout | |
| RSV older adult vaccine candidate | RSV, older adults aged 60+ years | Regulatory decision (EU, JP) | |
| RSV older adult vaccine candidate | RSV, older adults aged 50-59 years | Phase III data readout | |
| RSV older adult vaccine candidate | RSV, older adults aged 50-59 years | Regulatory submission (US, EU, JP) | |
| 2024 | linerixibat | GLISTEN (cholestatic pruritus in primary biliary cholangitis) | Phase III data readout |
| linerixibat | GLISTEN (cholestatic pruritus in primary biliary cholangitis) | Regulatory submission (US, EU) | |
| Nucala | Severe asthma | Regulatory decision (CN) | |
| Nucala | Nasal polyposis | Regulatory decision (JP) | |
| Nucala | MATINEE (chronic obstructive pulmonary disease) | Phase III data readout | |
| Nucala | MATINEE (chronic obstructive pulmonary disease) | Regulatory submission (US, EU, CN, JP) | |
| Blenrep | DREAMM-8 (2L+ multiple myeloma) | Regulatory decision (US, EU) | |
| Blenrep | DREAMM-7 (2L+ multiple myeloma) | Regulatory decision (EU) | |
| cobolimab | COSTAR (NSCLC) | Phase III data readout | |
| Jemperli | RUBY (1L endometrial cancer) | Regulatory decision (EU) | |
| momelotinib | MOMENTUM (myelofibrosis with anaemia) | Regulatory decision (EU) | |
| Zejula | ZEAL (1L maintenance NSCLC) | Phase III data readout | |
| gepotidacin | EAGLE (uncomplicated urinary tract infection) | Regulatory decision (US, EU) | |
| gepotidacin | EAGLE (uncomplicated urinary tract infection) | Regulatory submission (JP) | |
| gepotidacin | EAGLE (urogenital gonorrhoea) | Regulatory submission (US, EU) | |
| MenABCWY (gen 1) vaccine candidate | Meningitis ABCWY | Regulatory decision (US) | |
| Pneumococcal 24 valent (MAPS) vaccine candidate | Pneumococcal (paediatric) | Phase II data readout | |
| RSV older adult vaccine candidate | RSV, older adults aged 50-59 years | Regulatory decision (US, EU, JP) |
| Refer to pages 58 to 66 for further details on several key medicines and vaccines in development by therapy area. |
| Contents | Page |
| | |
| Q4 2022 R&D pipeline highlights | 6 |
| Financial performance - 2022 | 9 |
| Financial performance - three months to 31 December 2022 | 22 |
| Cash generation | 35 |
| Returns to shareholders | 37 |
| Total and Adjusted results | 39 |
| Income statement | 41 |
| Statement of comprehensive income | 42 |
| Balance sheet | 46 |
| Statement of changes in equity | 47 |
| Cash flow statement - year ended 31 December 2022 | 48 |
| Segment information | 49 |
| Legal matters | 51 |
| Additional information | 52 |
| Reconciliation of cash flow to movements in net debt | 57 |
| Net debt analysis | 57 |
| Free cash flow reconciliation | 57 |
| R&D commentary | 58 |
| Reporting definitions | 67 |
| Guidance, assumptions and cautionary statements | 68 |
| 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) |
| | | | |
| | | | |
| Registered in England & Wales: No. 3888792 | |||
|
| |||
| Registered Office: 980 Great West Road Brentford, Middlesex TW8 9GS | |||
| Financial performance - 2022 |
| Total results |
| The Total results for the Group are set out below. |
| | 2022 £m | | 2021(a) £m | | Growth £% | | Growth CER% |
| |
| | | | | | |
| Turnover | 29,324 | | 24,696 | | 19 | | 13 |
| |
| | | | | | |
| Cost of sales | (9,554) | | (8,163) | | 17 | | 16 |
| | | | | | | | |
| Gross profit | 19,770 | | 16,533 | | 20 | | 12 |
| |
| | | | | | |
| Selling, general and administration | (8,372) | | (7,070) | | 18 | | 13 |
| Research and development | (5,488) | | (5,019) | | 9 | | 4 |
| Royalty income | 758 | | 417 | | 82 | | 81 |
| Other operating expense | (235) | | (504) | | | | |
| | | | | | | | |
| Operating profit | 6,433 | | 4,357 | | 48 | | 31 |
| | | | | | | | |
| Finance income | 76 | | 14 | | | | |
| Finance expense | (879) | | (769) | | | | |
| Loss on disposal of interest in associates | - | | (36) | | | | |
| Share of after tax (loss)/profits of associates and joint ventures | (2) | | 33 | | | | |
| |
| | | | | | |
| Profit before taxation | 5,628 | | 3,599 | | 56 | | 37 |
| |
| | | | | | |
| Taxation | (707) | | (83) | | | | |
| Tax rate % | 12.6% |
| 2.3% |
|
|
|
|
| |
| | | | | | |
| Profit after taxation from continuing operations | 4,921 | | 3,516 | | 40 | | 23 |
| |
| | | | | | |
| Profit after taxation from discontinued operations and other gains/(losses) from the demerger | 3,049 | | 1,580 | | | | |
| Remeasurement of discontinued operations distributed to shareholders on demerger | 7,651 | | - | | | | |
| |
| | | | | | |
| Profit after taxation from discontinued operations | 10,700 | | 1,580 | | >100 | | >100 |
| |
| | | | | | |
| Total Profit after taxation for the period | 15,621 | | 5,096 | | >100 | | >100 |
| | | | | | | | |
| Profit attributable to non-controlling interests from continuing operations | 460 | | 200 | | | | |
| | | | | | | | |
| Profit attributable to shareholders from continuing operations | 4,461 | | 3,316 | | | | |
| | | | | | | | |
| Profit attributable to non-controlling interests from discontinued operations | 205 | | 511 | | | | |
| | | | | | | | |
| Profit attributable to shareholders from discontinued operations | 10,495 | | 1,069 | | | | |
| |
| | | | | | |
| | 15,621 | | 5,096 | | >100 | | >100 |
| | | | | | | | |
| Total Profit attributable to non-controlling interests | 665 | | 711 | | | | |
| | | | | | | | |
| Total Profit attributable to shareholders | 14,956 | | 4,385 | | | | |
| | | | | | | | |
| | 15,621 | | 5,096 | | | | |
| | | | | | | | |
| Earnings per share from continuing operations | 110.8p | | 82.9p | | 34 | | 18 |
| | | | | | | | |
| Earnings per share from discontinued operations | 260.6p | | 26.7p | | >100 | | >100 |
|
|
| | | | | | |
| Total earnings per share | 371.4p | | 109.6p | | >100 | | >100 |
| | | | | | | | |
| (a) | The 2021 comparative results have been restated on a consistent basis from those previously published to reflect the demerger of the Consumer Healthcare business (see page 34) and the impact of Share Consolidation implemented on 18 July 2022 (see page 56). |
| Adjusted results |
| The Adjusted results for the Group are set out below. Adjusted results are from continuing operations and excludes the Consumer Healthcare business (see details on page 55). Reconciliations between Total results and Adjusted results for 2022 and 2021 are set out on pages 18 to 19. |
| | 2022 £m | | % of turnover | | Growth £% | | Growth CER% |
| | | | | | | | |
| Turnover | 29,324 | | 100 | | 19 | | 13 |
| | | | | | | | |
| Cost of sales | (8,741) | | (29.8) | | 19 | | 18 |
| Selling, general and administration | (8,128) | | (27.7) | | 20 | | 15 |
| Research and development | (5,062) | | (17.3) | | 12 | | 6 |
| Royalty income | 758 | | 2.6 | | 82 | | 81 |
| | | | | | | | |
| Adjusted operating profit | 8,151 | | 27.8 | | 26 | | 14 |
| | | | | | | | |
| Adjusted profit before tax | 7,358 | | | | 27 | | 15 |
| Adjusted profit after tax | 6,220 | | | | 28 | | 16 |
| Adjusted profit attributable to shareholders | 5,625 | | | | 27 | | 15 |
| Adjusted earnings per share | 139.7p | | | | 27 | | 15 |
| |
| | | | | | |
| Operating profit by segment |
| | 2022 £m | | % of turnover | | Growth £% | | Growth CER% |
| | | | | | | | |
| Commercial Operations | 13,590 | | 46.3 | | 19 | | 10 |
| Research and Development | (5,060) | | | | 11 | | 5 |
| | | | | | | | |
| Segment profit | 8,530 | | 29.1 | | 24 | | 13 |
| Corporate & other unallocated costs | (379) | | | | | | |
| | | | | | | | |
| Adjusted operating profit | 8,151 | | 27.8 | | 26 | | 14 |
| | | | | | | | |
| Turnover |
| Commercial Operations |
| | 2022 | ||||
| | | | | | |
| | £m | | Growth £% | | Growth CER% |
| | | | | | |
| HIV | 5,749 | | 20 | | 12 |
| Oncology | 602 | | 23 | | 17 |
| Immuno-inflammation, respiratory and other | 2,609 | | 29 | | 20 |
| | | | | | |
| | 8,960 | | 23 | | 15 |
| Pandemic | 2,309 | | >100 | | >100 |
| | | | | | |
| Specialty Medicines | 11,269 |
| 37 |
| 29 |
| | | | | | |
| Meningitis | 1,116 | | 16 | | 11 |
| Influenza | 714 | | 5 | | (4) |
| Shingles | 2,958 | | 72 | | 60 |
| Established Vaccines | 3,085 | | 4 | | - |
| | | | | | |
| | 7,873 | | 24 | | 17 |
| Pandemic Vaccines | 64 | | (86) | | (86) |
| | | | | | |
| Vaccines | 7,937 |
| 17 |
| 11 |
| | | | | | |
| Respiratory | 6,548 | | 8 | | 3 |
| Other General Medicines | 3,570 | | (1) | | (2) |
| | | | | | |
| General Medicines | 10,118 |
| 5 |
| 1 |
| | | | | | |
| Commercial Operations | 29,324 |
| 19 |
| 13 |
| | | | | | |
| US | 14,542 | | 22 | | 10 |
| Europe | 6,348 | | 18 | | 19 |
| International | 8,434 | | 14 | | 14 |
| | | | |
| |
| Commercial Operations by region | 29,324 |
| 19 |
| 13 |
| | | | | | |
| Total turnover in 2022 was £29,324 million, up 19% at AER, 13% at CER, reflecting strong performance in all three product groups. Commercial Operations turnover, excluding COVID-19 solution sales, grew 16% at AER, 10% at CER. Specialty Medicines included £2,309 million sales of Xevudy, and double-digit growth across all therapy areas. Vaccines growth reflected strong Shingrix and Meningitis performance, partially offset by pandemic adjuvant sales in 2021. General Medicines reflected the recovery of the antibiotics market and the strong performance of Trelegy in respiratory across all regions.
Specialty Medicines
Specialty Medicines sales were £11,269 million, up 37% at AER, 29% at CER, driven by consistent double- digit growth in all therapy areas. Specialty Medicines, excluding sales of Xevudy, were £8,960 million up 23% at AER, 15% at CER.
HIV HIV sales were £5,749 million with growth of 20% at AER,12% at CER. The performance benefited from strong patient demand for the new HIV medicines (Dovato, Cabenuva, Juluca, Rukobia and Apretude), which contributed approximately three quarters of the growth. US pricing favourability and year-end inventory build together contributed one third of the growth which was partially offset by International tender decline.
New HIV products delivered sales of over two billion to £2,474 million, up 78% at AER, 67% at CER, representing 43% of the total HIV portfolio compared to 29% last year. Growth was primarily driven by sales of Dovato and Cabenuva. Dovato recorded sales of £1,375 million up 75% at AER and 65% at CER and Cabenuva, the first long acting injectable for the treatment of HIV-1 infection, recorded sales of £340 million. Apretude, the first long acting injectable for the prevention of HIV-1 delivered sales of £41 million.
Oncology Oncology sales were £602 million, up 23% at AER, 17% at CER. Zejula sales of £463 million were up 17% at AER, 12% at CER driven by the first line indication, but with diagnosis and treatment rates continuing to be impacted by the pandemic especially in the US. Sales of Blenrep of £118 million grew 33% at AER, 25% at CER, and included the impact of withdrawal from US market in Q4 2022.
Immuno-inflammation, Respiratory and Other Immuno-inflammation, Respiratory and Other sales were £2,609 million up 29% at AER, 20% at CER on strong performance of Benlysta and Nucala. Benlysta sales were £1,146 million, up 31% at AER, 20% at CER, representing strong underlying demand in US and worldwide. Nucala sales were £1,423 million, up 25% at AER, 18% at CER, reflecting continued strong patient demand and the launch of additional indications.
Pandemic Sales of Xevudy were £2,309 million, compared to £958 million sales in 2021. Sales were delivered in all regions, comprising £828 million in the US, £456 million in Europe, and £1,025 million in International.
Vaccines
Vaccines turnover was £7,937 million, up 17% at AER, 11% at CER in total, and up 24% at AER, 17% at CER excluding pandemic adjuvant sales. The performance reflected a favourable comparator, which was impacted by COVID-19 related disruptions in several markets primarily in H1 2021, and strong commercial execution of Shingrix, particularly in the US and Europe.
Meningitis Meningitis vaccines sales grew 16% at AER, 11% at CER to £1,116 million mainly driven by Bexsero up 16% at AER, 12% at CER to £753 million resulting from higher CDC (Center for Disease Control) demand and increased share in the US. Menveo sales were also up 27% AER, 18% CER to £345 million, primarily driven by post-pandemic vaccination catch-up and higher public demand in International, together with favourable pricing mix and share gain in the US.
Shingles Shingrix sales grew 72% at AER, 60% at CER to £2,958 million. All regions grew significantly reflecting post-pandemic rebound, strong uptake and new market launches with more than half of the growth contributed from outside of the US. In the US, Shingrix grew 46% at AER, 32% at CER to £1,964 million due to higher non-retail and retail demand and strong commercial execution. Germany and China contributed strongly to the Shingrix growth. Shingrix was launched in 9 markets during 2022 and is now available in 26 countries.
Influenza Fluarix/FluLaval sales grew by 5% AER but decreased 4% CER to £714 million, primarily driven by lower post-pandemic demand in Europe and the US, partly offset by lower expected returns in the US.
Established Vaccines Established Vaccines grew 4% AER but was stable at CER to £3,085 million mainly resulting from supply constraints in MMR/V vaccines and lower tender demand in International for Synflorix. This was offset by hepatitis vaccines demand rebound in the US and Europe and Boostrix post-pandemic demand recovery and increased share in the US.
Pandemic Vaccines Pandemic Vaccines decreased 86% AER and CER primarily reflecting comparison to 2021 pandemic adjuvant sales to the US and Canadian governments partly offset by GSK's share of 2022 contracted European volumes related to the COVID-19 booster vaccine developed through a collaboration with Sanofi Pasteur (Sanofi).
General Medicines
General Medicines sales in the year were £10,118 million, up 5% at AER, 1% at CER, with the impact of generic competition in US, Europe and Japan offset by Trelegy growth in respiratory and the post-pandemic rebound of the antibiotic market since H2 2021, in Other General Medicines.
Respiratory Respiratory sales were £6,548 million, up 8% at AER, 3% at CER. The performance was driven by Trelegy sales of £1,729 million, up 42% AER, 32% CER, including strong growth across all regions. Advair/Seretide sales of £1,159 million decreased 15% at AER, 17% at CER predominantly reflecting the adverse impact of generic competition, with growth in certain International markets due to targeted promotion offsetting the decrease.
Other General Medicines Other General Medicines sales were £3,570 million, decreasing 1% at AER, 2% at CER. Augmentin sales were £576 million, up 35% at AER, 38% at CER, reflecting the post pandemic rebound of the antibiotic market since H2 2021 in the International and Europe regions. This partially offsets the ongoing adverse impact of generic competition, and approximately two percentage points impact at AER and CER from the divestment of cephalosporin products in Q4 2021.
By Region
US In the US, sales were £14,542 million, up 22% at AER, 10% at CER. Sales adjusted for COVID-19 solutions were up 24% AER, 12% CER. Sales of Xevudy were £828 million.
In Specialty, HIV sales of £3,756 million were up 30% at AER, 17% at CER. Growth benefited from strong patient demand for all new HIV products, pricing favourability and year-end inventory build. New HIV medicines (Dovato, Cabenuva, Juluca, Rukobia and Apretude) sales were £1,685 million up 88% at AER, 70% at CER. Nucala in respiratory and Benlysta in immunology both continued to grow double-digit and reflected ongoing and strong patient demand. Oncology sales increased 14% at AER, 3% at CER with diagnosis and treatment rates continuing to be impacted by the pandemic for Zejula, and the withdrawal of Blenrep from the US market in Q4 2022.
Vaccine sales were £4,243 million, up 22% at AER, 10% at CER, excluding the impact of pandemic adjuvant sales in 2021, sales increased 31% at AER, 18% at CER. The performance was primarily driven by Shingrix sales of £1,964 million up 46% at AER, 32% at CER, mostly due to higher non-retail and retail demand and strong commercial execution. Demand recovery in Established Vaccines and share gains in Meningitis vaccines also contributed to growth.
General Medicines sales were £3,572 million up 10% at AER down 1% at CER. Trelegy was up 47% at AER, 32% at CER reflecting increased patient demand and growth of the single inhaler triple therapy market, and Flovent grew on launch of authorised generics in the year. Overall, there was a three-percentage point reduction in growth of US General Medicines due to prior period Returns and Rebates (RAR) adjustments in the year.
Europe In Europe, sales were £6,348 million, up 18% at AER, 19% at CER, including COVID-19 solution sales of £513 million contributing 8 percentage points of growth at AER and CER.
In Specialty Medicines, HIV sales were £1,310 million up 10% at AER, 10% at CER primarily driven by strong patient demand for Dovato, Cabenuva and Juluca. Dovato delivered sales of £478 million, Juluca £127 million and Cabenuva £40 million. Benlysta in immunology, Nucala in respiratory, and Oncology medicines Zejula, Blenrep and Jemperli all continued to show strong double-digit growth.
Vaccine sales were £1,884 million, up 31% at AER, 32% at CER. The performance was driven by Shingrix sales of £688 million, >100% at AER and CER, particularly in Germany. Pandemic adjuvant sales of £57 million contributed four percentage points of growth at AER and CER.
General Medicines sales of £2,079 million decreased 3% at AER and CER, reflecting the ongoing impact of generic competitive pressures on Seretide and the divestment in Q4 2021 of cephalosporin products which caused one percentage point of drag on growth at AER and CER. This was partly offset, however, by strong demand for Trelegy and the growth of Augmentin following the post-pandemic rebound of the antibiotic market since H2 2021.
International International sales were £8,434 million, up 14% at AER and CER, including Xevudy sales of £1,025 million. Sales grew 7% AER and 6% CER excluding sales of COVID-19 solutions.
In Specialty, HIV sales were £683 million, stable at AER and decreased 3% at CER, primarily driven by tender decline. Excluding tenders, International grew driven by strong Dovato growth. Combined Tivicay and Triumeq sales were £506 million, down 12% at AER and 15% at CER. Nucala sales of £242 million grew 24% at AER and 28% at CER reflecting strong market growth and patient uptake. Benlysta sales of £114 million grew 44% at AER, 43% at CER reflecting growth in biological market in Japan and inclusion on China's National Reimbursement Drug List.
Vaccine sales were £1,810 million, down 3% at AER, 5% at CER, reflecting an 11 percentage point drag at AER and CER from COVID-19 vaccine adjuvant sales in 2021. Growth excluding COVID-19 solutions was driven by strong Shingrix take-up in China, Canada and Japan more than offsetting the impact of supply constraints in MMR/V vaccines and lower Synflorix tender demand across several markets.
General Medicines sales were £4,467 million up 5% at AER and CER. Respiratory sales of £1,955 million increased 10% at AER, 9% at CER, with Trelegy sales up 47% at AER, 48% at CER reflecting strong demand and inclusion on China's National Reimbursement Drug List. Sales of Advair/Seretide were up 3% at AER, 1% at CER with the adverse impact of generic competition offset by growth in certain markets due to targeted promotion. Other General Medicines sales of £2,512 million increased 1% at AER, 2% at CER, and reflected growth of Augmentin following the post-pandemic rebound of the antibiotic market since H2 2021, partially offset by generic competition and price reductions in certain markets. |
| Operating performance |
| Cost of sales Total cost of sales as a percentage of turnover was 32.6%, 0.5 percentage points lower at AER and 0.9 percentage points higher in CER terms than 2021.
Adjusted cost of sales as a percentage of turnover was 29.8%, 0.1 percentage points higher at AER and 1.3 percentage points higher at CER compared with 2021. This primarily reflected higher sales of lower margin Xevudy compared to 2021 which included higher margin pandemic adjuvant sales, increasing cost of sales margin by 2.5 percentage points at AER and CER, as well as the impact of increased commodity prices and freight costs. This was partially offset by a favourable mix primarily from increased sales of Shingrix in the US and Europe and increased sales of HIV medicines in the US, lower inventory adjustments and write offs in Vaccines and continued contribution from restructuring savings.
Selling, general and administration Total SG&A costs as a percentage of turnover were 28.6%, 0.1 percentage points lower at AER and stable at CER compared to 2021. This included a reduction in restructuring charges.
Adjusted SG&A costs as a percentage of turnover were 27.7%, 0.4 percentage points higher at AER and 0.5 percentage points higher at CER than in 2021. Adjusted SG&A costs increased 20% at AER, 15% at CER which primarily reflected an increased level of launch investment in Specialty Medicines particularly HIV and Vaccines including Shingrix to drive post-pandemic recovery demand and support market expansion. The growth in Adjusted SG&A also reflected an unfavourable comparison to a beneficial legal settlement in 2021 as well as impairment provisions relating to Russia and Ukraine. This growth was partly offset by the continuing benefit of restructuring and tight control of ongoing costs.
Research and development Total R&D expenditure was £5,488 million up 9% at AER, 4% at CER. This included amortisation and impairments.
Adjusted R&D expenditure in the full-year increased by 12% at AER, and 6% at CER, to £5,062 million. This reflected continued increased investment across Vaccines clinical development, including investments into our mRNA technology platforms, continued investment in the late-stage portfolio and several early discovery programmes, as well as expenditure related to our recent acquisition of Affinivax, Inc (Affinivax).
In addition, in Specialty Medicines, the level of R&D investment increased to support the phase III respiratory programme for depemokimab, a potential new medicine to treat severe asthma, and bepirovirsen, our study in chronic hepatitis B, in preparation for the start of the phase III trial. In Oncology, investment increased in our early-stage immuno-oncology assets and in momelotinib, our potential new treatment of myelofibrosis patients with anaemia, acquired as part of the recent Sierra Oncology acquisition. These increases in investment were offset by decreases related to the completion of several late-stage clinical development programmes and reduced R&D investment in COVID-19 pandemic solutions versus 2021.
Royalty income Royalty income was £758 million (2021: £417 million), up 82% at AER, 81% at CER, the increase primarily reflecting royalty income from Gilead under the settlement and licensing agreement with Gilead announced on 1 February 2022 and Gardasil royalty income increasing to £446 million due to higher sales. |
| Other operating income/(expense) Net other operating expense was £235 million (2021: £504 million) reflecting accounting charges of £1,726 million (2021: £1,101 million) arising from the remeasurement of contingent consideration liabilities and the liabilities for the Pfizer, Inc. (Pfizer) put option and Pfizer and Shionogi & Co. Ltd (Shionogi) preferential dividends in ViiV Healthcare. This included a remeasurement charge of £1,431 million (2021: £1,026 million) for the contingent consideration liability due to Shionogi, including the unwinding of the discount for £410 million and a charge for £1,021 million primarily from changes to exchange rates as well as adjustments to sales forecasts. This was partly offset by £0.9 billion upfront income received from the settlement with Gilead, fair value gain on investments including £229 million on the retained stake in Haleon reflecting an increase in share price since listing and milestone income from disposals. |
| Operating profit Total operating profit from continuing operations was £6,433 million compared with £4,357 million in 2021. This included the £0.9 billion upfront income received from the settlement with Gilead, increased profits on turnover growth of 19% at AER, 13% at CER and fair value gains on investments including £229 million on the retained stake in Haleon, partly offset by higher remeasurement charges for contingent consideration liabilities. Adjusted operating profit was £8,151 million, 26% higher at AER and 14% at CER than 2021 on a turnover increase of 13% at CER. The Adjusted operating margin of 27.8% was 1.5 percentage points higher at AER and 0.3 percentage points higher at CER compared to 2021. This primarily reflected the impact from low margin COVID-19 solutions sales (Xevudy), which reduced Adjusted Operating profit growth by 3% AER and CER and reduced the Adjusted operating margin by approximately 1.4 percentage points at AER and approximately 1.3 percentage points at CER. This was offset by operating leverage from strong sales growth, mix benefit, lower inventory adjustments and write offs and higher royalty income.
Contingent consideration cash payments made to Shionogi and other companies reduce the balance sheet liability and hence are not recorded in the income statement. Total contingent consideration cash payments in 2022 amounted to £1,137 million (2021: £856 million). These included cash payments made to Shionogi of £1,100 million (2021: £826 million).
Adjusted operating profit by business Commercial Operations operating profit was £13,590 million, up 19% at AER and 10% at CER on a turnover increase of 13% at CER. The operating margin of 46.3% was 0.1 percentage points lower at AER, 1.2 percentage points lower at CER than in 2021. This primarily reflected strong sales of lower margin Xevudy, increased investment behind launches in Specialty Medicines including HIV and Vaccines plus higher commodity, freight and distribution costs as well as an adverse comparison to a favourable legal settlement in 2021. This was partly offset by leverage from strong sales growth, mix and lower inventory adjustments and write-offs, continued tight control of ongoing costs, benefits from continued restructuring and increased royalty income from Biktarvy and Gardasil sales.
R&D segment operating expenses were £5,060 million, up 11% at AER, 5% at CER, primarily reflecting increased investment in Vaccines including priority investments for mRNA, late stage portfolio and expenditure from the acquisition of Affinivax and in Specialty Medicines in early stage HIV and depemokimab. This was partly offset by decreases related to the completion of several late-stage clinical development programmes and reduced R&D investment in COVID-19 pandemic solutions versus 2021.
Net finance costs Total net finance costs were £803 million compared with £755 million in 2021. Adjusted net finance costs were £791 million compared with £752 million in 2021. The increase is mainly driven by costs associated with the Sterling Notes repurchase in Q4 2022 and higher interest on tax offset by increased interest income due to higher interest rates and larger cash balances as a result of the Consumer Healthcare demerger.
Share of after tax profits of associates and joint ventures The share of after tax loss of associates and joint ventures was £2 million (2021: £33 million share of profit). In 2021, the Group also reported a net loss on disposal of interests in associates of £36 million, primarily driven by a loss on disposal of our interest in the associate Innoviva Inc. (Innoviva).
Taxation The charge of £707 million represented an effective tax rate on Total results of 12.6% (2021: 2.3%) and reflected the different tax effects of the various Adjusting items. Included in 2021 was a credit of £430 million resulting from the revaluation of deferred tax assets following enactment of the proposed change of UK corporation tax rates from 19% to 25%. Tax on Adjusted profit amounted to £1,138 million and represented an effective Adjusted tax rate of 15.5% (2021: 15.9%).
Issues related to taxation are described in Note 14, 'Taxation' in the Annual Report 2021. The Group continues to believe it has made adequate provision for the liabilities likely to arise from periods that are open and not yet agreed by relevant tax authorities. The ultimate liability for such matters may vary from the amounts provided and is dependent upon the outcome of agreements with relevant tax authorities.
Non-controlling interests The allocation of Total profit from continuing operations to non-controlling interests amounted to £460 million (2021: £200 million). The increase was primarily due to an increased allocation of ViiV Healthcare profits of £416 million (2021: £197 million), including the Gilead upfront settlement income partly offset by increased credits for remeasurement of contingent consideration liabilities, as well as higher net profits in some of the Group's other entities with non-controlling interests.
The allocation of Adjusted earnings from continuing operations to non-controlling interests amounted to £595 million (2021: £441 million). The increase in allocation primarily reflected an increased allocation of ViiV Healthcare profits of £551 million (2021: £438 million), as well as higher net profits in some of the Group's other entities with non-controlling interests.
Earnings per share from continuing operations Total EPS from continuing operations was 110.8p compared with 82.9p in 2021. This primarily reflected the £0.9 billion upfront income received from the settlement with Gilead, increased profits on turnover growth of 13% at CER and fair value gains on investments including the retained stake in Haleon, partly offset by higher remeasurement charges for contingent consideration liabilities and an unfavourable comparison due to a credit of £325 million to Taxation in Q2 2021 resulting from the revaluation of deferred tax assets.
Adjusted EPS was 139.7p compared with 110.3p in 2021, up 27% at AER, 15% at CER on a 13% CER turnover increase. Operating leverage from growth in sales of Specialty Medicines including HIV and Vaccines, beneficial mix and lower inventory adjustments and write-offs, higher royalty income and a lower effective tax rate was partly offset by increased investment behind launches in Specialty Medicines including HIV and Vaccines plus higher supply chain costs, freight and distribution costs and higher non-controlling interests. Growth in lower margin COVID-19 solutions sales reduced Adjusted EPS growth by 4% AER and 3% CER.
Profit and earnings per share from discontinued operations Discontinued operations include the Consumer Healthcare business and certain Corporate costs directly attributable to the Consumer Healthcare business. Profit after taxation from discontinued operations amounted to £10,700 million (2021: £1,580 million). This includes £10,084 million for the gain arising on the demerger of Consumer Healthcare split between the amount distributed to shareholders on demerger of £7,651 million and profit after taxation on discontinued operations for the retained stake of £2,433 million. In addition, the Profit after taxation from discontinued operations for the Consumer Healthcare business was £621 million (2021: £1,580 million).
EPS from discontinued operations was 260.6p, compared with 26.7p in 2021. The increase primarily reflected the gain arising on the demerger of the Consumer Healthcare business. For further details see page 55, discontinued operations.
Total earnings per share Total EPS was 371.4p compared with 109.6p in 2021. The increase primarily reflected the profit after taxation for discontinued operations recognised on the Consumer Healthcare business demerger, upfront income received from the settlement with Gilead, increased profits and fair value gains on investments, partly offset by higher remeasurement charges for contingent consideration liabilities and an unfavourable comparison due to a credit of £397 million to Taxation in 2021.
Currency impact on 2022 results The results for 2022 are based on average exchange rates, principally £1/$1.24, £1/€1.17 and £1/Yen 161. Comparative exchange rates are given on page 52. The period-end exchange rates were £1/$1.20, £1/€1.13 and £1/Yen 159.
In 2022, turnover was up 19% at AER and 13% at CER. Total EPS from continuing operations was 110.8p compared with 82.9p in 2021. Adjusted EPS was 139.7p compared with 110.3p in 2021, up 27% at AER and 15% at CER. The favourable currency impact primarily reflected the weakening of Sterling against the US Dollar, partly offset by strengthening in Sterling against the Euro and Japanese Yen. Exchange gains or losses on the settlement of intercompany transactions had a negligible impact on the twelve percentage point favourable currency impact on Adjusted EPS. |
| Adjusting items The reconciliations between Total results and Adjusted results for 2022 and 2021 are set out below. |
| Year ended 31 December 2022 |
| | Total results £m | | Profit from discon- tinued operations £m | | Intangible amort- isation £m | | Intangible impair- ment £m | | Major restruct- uring £m | | Trans- action- related £m | | Divest- ments, significant legal and other items £m | | Adjusted results £m |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Turnover | 29,324 |
|
|
|
|
|
|
|
|
|
|
|
|
| 29,324 |
| Cost of sales | (9,554) | | | | 648 | | | | 102 | | 45 | | 18 | | (8,741) |
| | | | | | | | | | | | | | | | |
| Gross profit | 19,770 | | | | 648 | | | | 102 | | 45 | | 18 | | 20,583 |
| | | | | | | | | | | | | | | | |
| Selling, general and administration | (8,372) | | | | | | | | 180 | | 13 | | 51 | | (8,128) |
| Research and development | (5,488) | | | | 91 | | 296 | | 39 | | | | | | (5,062) |
| Royalty income | 758 | | | | | | | | | | | | | | 758 |
| Other operating income/(expense) | (235) | | | | | | | | | | 1,692 | | (1,457) | | - |
| | | | | | | | | | | | | | | | |
| Operating profit | 6,433 |
|
|
| 739 |
| 296 |
| 321 |
| 1,750 |
| (1,388) |
| 8,151 |
| | | | | | | | | | | | | | | | |
| Net finance cost | (803) | | | | | | | | 2 | | | | 10 | | (791) |
| Share of after tax losses and joint of associates ventures | (2) | | | | | | | | | | | | | | (2) |
| | | | | | | | | | | | | | | | |
| Profit before taxation | 5,628 |
|
|
| 739 |
| 296 |
| 323 |
| 1,750 |
| (1,378) |
| 7,358 |
| | | | | | | | | | | | | | | | |
| Taxation | (707) | | | | (150) | | (64) | | (87) | | (242) | | 112 | | (1,138) |
| Tax rate % | 12.6% | | | | | | | | | | | | | | 15.5% |
| | | | | | | | | | | | | | | | |
| Profit after taxation from continuing operations | 4,921 |
|
|
| 589 |
| 232 |
| 236 |
| 1,508 |
| (1,266) |
| 6,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit after taxation from discontinued operations and other gains/(losses) from the demerger | 3,049 |
| (3,049) |
|
|
|
|
|
|
|
|
|
|
|
|
| Remeasurement of discontinued operations distributed to shareholders on demerger | 7,651 | | (7,651) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit after taxation from discontinued operations | 10,700 |
| (10,700) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total profit after taxation for the period | 15,621 |
| (10,700) |
| 589 |
| 232 |
| 236 |
| 1,508 |
| (1,266) |
| 6,220 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit attributable to non-controlling interest from continuing operations | 460 | | | | | | | | | | 135 | | | | 595 |
| | | | | | | | | | | | | | | | |
| Profit attributable to shareholders from continuing operations | 4,461 | | | | 589 | | 232 | | 236 | | 1,373 | | (1,266) | | 5,625 |
| | | | | | | | | | | | | | | | |
| Profit attributable to non-controlling interest from discontinued operations | 205 | | (205) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Profit attributable to shareholders from discontinued operations | 10,495 | | (10,495) | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
| 15,621 | | (10,700) | | 589 | | 232 | | 236 | | 1,508 | | (1,266) | | 6,220 |
|
| | | | | | | | | | | | | | | |
| Total profit attributable to non-controlling interests | 665 |
| (205) |
|
|
|
|
|
|
| 135 |
|
|
| 595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total profit attributable to shareholders | 14,956 |
| (10,495) |
| 589 |
| 232 |
| 236 |
| 1,373 |
| (1,266) |
| 5,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 15,621 | | (10,700) | | 589 | | 232 | | 236 | | 1,508 | | (1,266) | | 6,220 |
|
| | | | | | | | | | | | | | | |
| Earnings per share from continuing operations | 110.8p | | | | 14.6p | | 5.8p | | 5.9p | | 34.1p | | (31.5)p | | 139.7p |
| | | | | | | | | | | | | | | | |
| Earnings per share from discontinued operations | 260.6p | | (260.6)p | | | | | | | | | | | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total earnings per share | 371.4p |
| (260.6)p |
| 14.6p |
| 5.8p |
| 5.9p |
| 34.1p |
| (31.5)p |
| 139.7p |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of shares (millions) | 4,026 | | | | | | | | | | | | | | 4,026 |
| | | | | | | | | | | | | | | | |
| Year ended 31 December 2021(a) |
| | Total results £m | | Profit from discon- tinued operations £m | | Intangible amort- isation £m | | Intangible impair- ment £m | | Major restruct- uring £m | | Trans- action- related £m | | Divest- ments, significant legal and other items £m | | Adjusted results £m |
| | | | | | | | | | | | | | | | |
| Turnover | 24,696 |
|
|
|
|
|
|
|
|
|
|
|
|
| 24,696 |
| Cost of sales | (8,163) | | | | 660 | | | | 102 | | 28 | | 27 | | (7,346) |
| | | | | | | | | | | | | | | | |
| Gross profit | 16,533 | | | | 660 | | | | 102 | | 28 | | 27 | | 17,350 |
| | | | | | | | | | | | | | | | |
| Selling, general and administration | (7,070) | | | | | | | | 277 | | 9 | | 35 | | (6,749) |
| Research and development | (5,019) | | | | 101 | | 347 | | 45 | | | | 1 | | (4,525) |
| Royalty income | 417 | | | | | | | | | | | | | | 417 |
| Other operating income/(expense) | (504) | | | | | | | | | | 1,106 | | (602) | | - |
| | | | | | | | | | | | | | | | |
| Operating profit | 4,357 |
|
|
| 761 |
| 347 |
| 424 |
| 1,143 |
| (539) |
| 6,493 |
| | | | | | | | | | | | | | | | |
| Net finance cost | (755) | | | | | | | | 2 | | | | 1 | | (752) |
| Loss on disposal of interest in associates | (36) | | | | | | | | | | | | 36 | | - |
| Share of after tax losses and joint of associates ventures | 33 | | | | | | | | | | | | | | 33 |
| | | | | | | | | | | | | | | | |
| Profit before taxation | 3,599 |
|
|
| 761 |
| 347 |
| 426 |
| 1,143 |
| (502) |
| 5,774 |
| | | | | | | | | | | | | | | | |
| Taxation | (83) | | | | (153) | | (81) | | (79) | | (179) | | (343) | | (918) |
| Tax rate % | 2.3% |
| | | | | | | | | | | |
| 15.9% |
| | | | | | | | | | | | | | | | |
| Profit after taxation from continuing operations | 3,516 |
|
|
| 608 |
| 266 |
| 347 |
| 964 |
| (845) |
| 4,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit after taxation from discontinued operations and other gains/(losses) from the demerger | 1,580 | | (1,580) | | | | | | | | | | | | |
| Remeasurement of discontinued operations distributed to shareholders on demerger | - | | - | | | | | | | | | | | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit after taxation from discontinued operations | 1,580 |
| (1,580) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total profit after taxation for the period | 5,096 |
| (1,580) |
| 608 |
| 266 |
| 347 |
| 964 |
| (845) |
| 4,856 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit attributable to non-controlling interest from continuing operations | 200 | | | | | | | | | | 241 | | | | 441 |
| | | | | | | | | | | | | | | | |
| Profit attributable to shareholders from continuing operations | 3,316 | | | | 608 | | 266 | | 347 | | 723 | | (845) | | 4,415 |
| | | | | | | | | | | | | | | | |
| Profit attributable to non-controlling interest from discontinued operations | 511 | | (511) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Profit attributable to shareholders from discontinued operations | 1,069 | | (1,069) | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
| 5,096 | | (1,580) | | 608 | | 266 | | 347 | | 964 | | (845) | | 4,856 |
|
| | | | | | | | | | | | | | | |
| Total profit attributable to non-controlling interests | 711 |
| (511) |
|
|
|
|
|
|
| 241 |
|
|
| 441 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total profit attributable to shareholders | 4,385 |
| (1,069) |
| 608 |
| 266 |
| 347 |
| 723 |
| (845) |
| 4,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5,096 | | (1,580) | | 608 | | 266 | | 347 | | 964 | | (845) | | 4,856 |
|
| | | | | | | | | | | | | | | |
| Earnings per share from continuing operations | 82.9p | | | | 15.2p | | 6.6p | | 8.7p | | 18.1p | | (21.2)p | | 110.3p |
| | | | | | | | | | | | | | | | |
| Earnings per share from discontinued operations | 26.7p | | (26.7)p | | | | | | | | | | | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total earnings per share | 109.6p |
| (26.7)p |
| 15.2p |
| 6.6p |
| 8.7p |
| 18.1p |
| (21.2)p |
| 110.3p |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of shares (millions) | 4,003 | | | | | | | | | | | | | | 4,003 |
| | | | | | | | | | | | | | | | |
| (a) | The 2021 comparative results have been restated on a consistent basis from those previously published to reflect the demerger of the Consumer Healthcare business (see page 34) and the impact of Share Consolidation implemented on 18 July 2022 (see page 56). |
| Major restructuring and integration |
| Total Major restructuring charges from continuing operations incurred in 2022 were £321 million (2021: £424 million), analysed as follows: |
| | 2022 | | 2021 | ||||||||
| | | | | | | | | | | | |
| | Cash £m |
| Non- cash £m |
| Total £m | | Cash £m | | Non- cash £m | | Total £m |
| | | | | | | | | | | | |
| Separation Preparation restructuring programme | 177 |
| 110 |
| 287 | | 353 | | 59 | | 412 |
| Significant acquisitions | 20 |
| - |
| 20 | | - | | - | | - |
| Legacy programmes | 9 |
| 5 |
| 14 | | 32 | | (20) | | 12 |
| |
|
|
|
|
| | | | | | |
| | 206 |
| 115 |
| 321 | | 385 | | 39 | | 424 |
| |
|
|
|
|
| | | | | | |
| Cash charges of £177 million under the Separation Preparation programme primarily arose from the restructuring of some administrative functions as well as Global Supply Chain, R&D functions and commercial. The non-cash charges of £110 million primarily reflected the write-down of assets in administrative and manufacturing locations and impairment of IT assets.
Total cash payments made in 2022 were £388 million (2021: £551 million), £332 million (2021: £428 million) relating to the Separation Preparation restructuring programme, £17 million relating to significant acquisitions (2021: £nil) and £39 million (2021: £123 million) relating to other legacy programmes including the settlement of certain charges accrued in previous quarters. |
| The analysis of Major restructuring charges by Income statement line was as follows: |
| | 2022 £m | | 2021 £m |
| | | | |
| Cost of sales | 102 | | 102 |
| Selling, general and administration | 180 | | 277 |
| Research and development | 39 | | 45 |
| |
| | |
| Total Major restructuring costs from continuing operations | 321 | | 424 |
| |
| | |
| The benefit in 2022 from restructuring programmes was £0.5 billion, primarily relating to the Separation Preparation restructuring programme.
The Group initiated in Q1 2020 a Separation Preparation programme to prepare for the separation of GSK into two companies. The programme aims to: |
| · | Drive a common approach to R&D with improved capital allocation |
| · | Align and improve the capabilities and efficiency of global support functions to support GSK |
| · | Further optimise the supply chain and product portfolio, including the divestment of non-core assets |
| · | Prepare Consumer Healthcare to operate as a standalone company |
| The programme has delivered £0.9 billion of annual savings by 2022 and targets to deliver £1.0 billion by 2023, with total costs estimated at £2.4 billion, of which £1.6 billion is expected to be cash costs. The proceeds of divestments have largely covered the cash costs of the programme. |
| Materially all of the Separation Preparation restructuring programme has been included as part of continuing operations. The legacy Consumer Healthcare Joint Venture integration programme is included as part of discontinued operations. |
| Transaction-related adjustments Transaction-related adjustments from continuing operations resulted is a net charge of £1,750 million (2021: £1,143 million). This included a net £1,726 million accounting charge for the remeasurement of contingent consideration liabilities and the liabilities for the Pfizer put option and Pfizer and Shionogi preferential dividends in ViiV Healthcare. |
| Charge/(credit) | 2022 £m | | 2021 £m |
| | | | |
| Contingent consideration on former Shionogi-ViiV Healthcare joint Venture (including Shionogi preferential dividends) | 1,431 | | 1,026 |
| ViiV Healthcare put options and Pfizer preferential dividends | 85 | | 48 |
| Contingent consideration on former Novartis Vaccines business | 193 | | 27 |
| Contingent consideration on acquisition of Affinivax | 17 | | - |
| Other adjustments | 24 | | 42 |
| |
| | |
| Total transaction-related charges | 1,750 | | 1,143 |
| |
| | |
| The £1,431 million charge relating to the contingent consideration for the former Shionogi-ViiV Healthcare joint venture represented an increase in the valuation of the contingent consideration due to Shionogi, as a result of the unwind of the discount for £410 million and a charge of £1,021 million primarily from exchange rates as well as adjustments to sales forecasts. The £85 million charge relating to the ViiV Healthcare put option and Pfizer preferential dividends represented an increase in the valuation of the put option primarily as a result of updated exchange rates as well as adjustments to sales forecasts.
The ViiV Healthcare contingent consideration liability is fair valued under IFRS. An explanation of the accounting for the non-controlling interests in ViiV Healthcare is set out on page 40.
Divestments, significant legal charges, and other items Divestments, significant legal charges and other items primarily included the £922 million upfront settlement income received from Gilead, a fair value gain on investments including £229 million on the retained stake in Haleon as well as milestone income and gains from a number of asset disposals, partly offset by certain other Adjusting items.
Discontinued operations From Q2 2020, the Group started to report additional costs to prepare for establishment of the Consumer Healthcare business as an independent entity ("Separation costs"). These are now presented as part of discontinued operations. Total separation costs incurred in 2022 were £366 million (2021: £314 million). This includes £103 million relating to transaction costs incurred in connection with the demerger and preparatory admission costs related to the listing of Haleon.
Total separation costs to date were £748 million including £141 million relating to transaction costs. |
| Financial performance - Q4 2022 |
| Total results |
| The Total results for the Group are set out below. |
| | Q4 2022 £m | | Q4 2021(a) £m | | Growth £% | | Growth CER% |
| |
| | | |
| | |
| Continuing Operations |
| | | | | | |
|
|
| | | | | | |
| Turnover | 7,376 | | 7,076 | | 4 | | (3) |
| |
| | | | | | |
| Cost of sales | (2,238) | | (2,785) | | (20) | | (21) |
| |
| | | | | | |
| Gross profit | 5,138 | | 4,291 | | 20 | | 9 |
| |
| | | | | | |
| Selling, general and administration | (2,438) | | (2,193) | | 11 | | 4 |
| Research and development | (1,797) | | (1,376) | | 31 | | 23 |
| Royalty income | 206 | | 137 | | 50 | | 48 |
| Other operating income/(expense) | 759 | | (367) | | | | |
| |
| | | | | | |
| Operating profit | 1,868 | | 492 | | >100 | | >100 |
| |
| | | | | | |
| Finance income | 26 | | - | | | | |
| Finance expense | (270) | | (187) | | | | |
| Share of after tax (losses)/profits of associates and joint ventures | 2 | | (2) | | | | |
| |
| | | | | | |
| Profit before taxation | 1,626 | | 303 | | >100 | | >100 |
| |
| | | | | | |
| Taxation | (1) | | 117 | | | | |
| Tax rate % | 0.1% |
| (38.6%) |
|
|
|
|
| |
| | | | | | |
| Profit after taxation from continuing operations | 1,625 | | 420 | | >100 | | >100 |
| |
| | | | | | |
| Profit after taxation from discontinued operations and other gains/(losses) from the demerger | (5) | | 510 | | | | |
| |
| | | | | | |
| Profit after taxation from discontinued operations | (5) |
| 510 | | >(100) | | >(100) |
| |
| | | | | | |
| Profit after taxation for the period | 1,620 | | 930 | | 74 | | 53 |
| |
| | | | | | |
| Profit attributable to non-controlling interest from continuing operations | 125 | | (6) | | | | |
| |
| | | | | | |
| Profit attributable to shareholders from continuing operations | 1,500 | | 426 | | | | |
| |
| | | | | | |
| Profit attributable to non-controlling interest from discontinued operations | - | | 187 | | | | |
| |
| | | | | | |
| Profit attributable to shareholders from discontinued operations | (5) | | 323 | | | | |
| |
| | | | | | |
| | 1,620 | | 930 | | 74 | | 53 |
| |
| | | | | | |
| Total profit attributable to non-controlling interest | 125 | | 181 | | | | |
| |
| | | | | | |
| Total profit attributable to shareholders | 1,495 | | 749 | | | | |
| |
| | | | | | |
| | 1,620 | | 930 | | 74 | | 53 |
| |
| | | | | | |
| Earnings per share from continuing operations | 37.2p | | 10.6p | | >100 | | >100 |
| |
| | | | | | |
| Earnings per share from discontinued operations | (0.1)p | | 8.1p | | >(100) | | >(100) |
|
|
| | | | | | |
| Total earnings per share | 37.1p | | 18.7p | | 98 | | 75 |
|
|
| | | | | | |
| (a) | The 2021 comparative results have been restated on a consistent basis from those previously published to reflect the demerger of the Consumer Healthcare business (see page 34) and the impact of Share Consolidation implemented on 18 July 2022 (see page 56). |
| Adjusted results |
| The Adjusted results for the Group are set out below. Adjusted results are from continuing operations and exclude the Consumer Healthcare business (see details on page 39). Reconciliations between Total results and Adjusted results for Q4 2022 and Q4 2021 are set out on pages 31 and 32. |
| | Q4 2022 £m | | % of turnover | | Growth £% | | Growth CER% |
| | | | | | | | |
| Turnover | 7,376 | | 100 | | 4 | | (3) |
| | | | | | | | |
| Cost of sales | (2,030) | | (27.5) | | (22) | | (23) |
| Selling, general and administration | (2,435) | | (33.0) | | 21 | | 13 |
| Research and development | (1,522) | | (20.6) | | 18 | | 11 |
| Royalty income | 206 | | 2.7 | | 50 | | 48 |
| | | | | | | | |
| Adjusted operating profit | 1,595 | | 21.6 | | 21 | | 5 |
| | | | | | | | |
| Adjusted profit before tax | 1,362 | | | | 21 | | 3 |
| Adjusted profit after tax | 1,190 | | | | 13 | | (3) |
| Adjusted profit attributable to shareholders | 1,041 | | | | 10 | | (6) |
| Adjusted earnings per share | 25.8p | | | | 10 | | (6) |
| |
| | | | | | |
| Operating profit by segment |
| | Q4 2022 £m | | % of turnover | | Growth £% | | Growth CER% |
| | | | | | | | |
| Commercial Operations | 3,219 | | 43.6 | | 19 | | 8 |
| Research and Development | (1,512) | | | | 18 | | 10 |
| | | | | | | | |
| Segment profit | 1,707 | | 23.1 | | 21 | | 6 |
| Corporate & other unallocated costs | (112) | | | | | | |
| | | | | | | | |
| Adjusted operating profit | 1,595 | | 21.6 | | 21 | | 5 |
| |
| | | | | | |
| Turnover |
| Commercial Operations |
| | Q4 2022 | ||||
| | | | | | |
| | £m | | Growth £% | | Growth CER% |
| | | | | | |
| HIV | 1,678 | | 33 | | 21 |
| Oncology | 157 | | 19 | | 11 |
| Immuno-inflammation, respiratory and other | 721 | | 33 | | 22 |
| | | | | | |
| | 2,556 | | 32 | | 21 |
| Pandemic | 125 | | (85) | | (85) |
| | | | | | |
| Specialty Medicines | 2,681 |
| (3) |
| (11) |
| | | | | | |
| Meningitis | 228 | | 18 | | 11 |
| Influenza | 276 | | 13 | | 2 |
| Shingles | 769 | | 29 | | 18 |
| Established Vaccines | 743 | | 9 | | 4 |
| | | | | | |
| | 2,016 | | 17 | | 9 |
| Pandemic Vaccines | 58 | | (37) | | (37) |
| | | | | | |
| Vaccines | 2,074 |
| 15 |
| 7 |
| | | | | | |
| Respiratory | 1,682 | | 9 | | 2 |
| Other General Medicines | 939 | | (2) | | (3) |
| | | | | | |
| General Medicines | 2,621 |
| 5 |
| - |
| | | | | | |
| Commercial Operations | 7,376 |
| 4 |
| (3) |
| | | | | | |
| US | 3,624 | | 3 | | (10) |
| Europe | 1,655 | | 9 | | 7 |
| International | 2,097 | | 3 | | 3 |
| | | | |
| |
| Commercial Operations by region | 7,376 |
| 4 |
| (3) |
| | | | | | |
| Total turnover in the quarter was £7,376 million, up 4% at AER, down 3% at CER reflecting strong sales of COVID-19 solutions in Q4 2021. Turnover grew 17% at AER, 9% at CER excluding sales of COVID-19 solutions. Specialty Medicines saw double digit growth of all therapy areas (excluding COVID-19 solutions). Vaccines growth reflected strong Shingrix and Meningitis performance, partially offset by an unfavourable comparison to pandemic adjuvant sales in Q4 2021. General Medicines reflected strong performance of Trelegy in all regions and continued recovery of the antibiotics market.
Specialty Medicines
Total Specialty Medicines sales in the quarter were £2,681 million down 3% at AER, 11% at CER reflecting strong Xevudy sales in Q4 2021. Specialty Medicines sales in the quarter excluding Xevudy were £2,556 million, up 32% at AER, 21% at CER, driven by consistent growth in all therapy areas.
HIV HIV sales were £1,678 million with growth up 33% at AER, 21% at CER in the quarter. The performance benefited from strong patient demand for new HIV products (Dovato, Cabenuva, Juluca, Rukobia and Apretude), which contributed approximately half of the growth. US year-end inventory build contributed one third of the growth with favourable US pricing and International tender phasing delivering the remainder.
New HIV products delivered quarterly sales of £806 million up 87% at AER, 70% at CER, representing 48% of the total HIV portfolio compared to 34% in the same quarter last year. The growth was primarily driven by sales of Dovato and Cabenuva. Dovato recorded sales of £438 million and growth of 72% AER, and 59% CER. Cabenuva, the first long acting injectable for the treatment of human immunodeficiency virus type-1 (HIV-1) infection, recorded sales of £129 million. Apretude, the first long acting injectable for the prevention of HIV-1, delivered sales of £21 million.
Oncology Oncology sales in the quarter were £157 million, up 19% at AER, 11% at CER. Zejula sales of £125 million, were up 16% at AER, 8% at CER, and Blenrep sales of £27 million were up 23% at AER, 14% at CER, including impact of withdrawal from the US market in Q4 2022.
Immuno-inflammation, Respiratory and Other Immuno-inflammation, Respiratory and Other sales were £721 million up 33% at AER, 22% at CER on strong performance of Benlysta and Nucala. Benlysta sales were £326 million, up 34% at AER, 20% at CER including strong underlying demand in US and worldwide. Nucala sales were £395 million, up 27% at AER, 18% at CER on continued strong demand in all regions.
Pandemic Sales of Xevudy were £125 million, down 85% AER and CER versus Q4 2021. This reflects strong sales at the end of 2021. In Q4 2022, the majority of sales were contracted volumes in the International region.
Vaccines
Vaccine sales were £2,074 million, up 15% at AER, 7% at CER in total and up 17% at AER, 9% at CER excluding pandemic adjuvant sales. The performance benefitted from post-pandemic rebound and strong commercial execution of Shingrix.
Meningitis Meningitis vaccines sales grew 18% at AER, 11% at CER to £228 million mainly driven by Menveo up 60% at AER, 50% at CER to £77 million resulting from higher public demand and post-pandemic vaccination catch-up in International.
Bexsero sales were up 18% AER, 13% CER to £150 million, mostly due to the implementation of a Meningitis B national immunisation programme in France and higher private market demand in International. In the US, Menveo and Bexsero share gains were offset by unfavourable CDC purchase patterns.
Shingles Shingrix sales grew 29% at AER, 18% at CER to £769 million reflecting post-pandemic rebound, strong commercial execution and new launch uptake in Europe and International. US sales grew 6% at AER but decreased 7% at CER to £480 million mainly driven by expected wholesaler destocking after higher than usual inventory levels in Q2 and Q3 2022, partly offset by non-retail demand growth.
Influenza Fluarix/FluLaval sales grew by 13% AER, 2% CER to £276 million, primarily due to a favourable prior period RAR adjustment and lower expected returns in the US, partly offset by lower post-pandemic demand and competitive pressures in Europe.
Established Vaccines Established vaccines grew by 9% AER, 4% at CER to £743 million mainly driven by increased sales of divested vaccines partly offset by Synflorix lower tender demand in International.
Pandemic Vaccines Pandemic vaccines decreased by 37% AER and CER due to Q4 2021 pandemic adjuvant contracted volumes to the Canadian government. In Q4 2022, pandemic vaccines sales represent GSK's share of contracted European volumes related to the COVID-19 booster vaccine developed through a collaboration with Sanofi.
General Medicines
General Medicines sales in the quarter were £2,621 million, up 5% at AER, stable at CER, with the impact of generic competition in US and Europe offset by Trelegy growth in respiratory and the post-pandemic rebound of the antibiotic market in Other General Medicines. Overall, there was a 5 percentage point reduction in growth at AER and CER due to high prior period RAR adjustments in the comparator.
Respiratory Respiratory sales were £1,682 million, up 9% at AER, 2% at CER. The performance was driven by Trelegy sales of £457 million, up 30% at AER, 19% at CER with strong growth in all regions. Advair/Seretide sales of £330 million continued to be eroded by generic competition, decreasing by 1% at AER, 6% at CER.
Other General Medicines Other General Medicines sales were £939 million, down 2% at AER, 3% at CER. Augmentin sales were £167 million, up 28% at AER, 30% at CER reflecting the rebound of the antibiotic market post pandemic. This was offset by the ongoing adverse impact of generic competition.
By Region
US In the US, sales were £3,624 million, up 3% at AER, down 10% at CER. Sales adjusted for COVID-19 solutions were up 23% at AER, 8% at CER. There were £10 million sales of Xevudy and none for vaccine pandemic adjuvant in the quarter, but £586 million sales of Xevudy in Q4 2021 caused a drag on growth of 20 percentage point AER and 18 percentage points CER in the quarter.
In Specialty Medicines, HIV sales of £1,163 million were up 45% at AER, 28% at CER. Performance benefited from strong patient demand for new products (Dovato, Cabenuva, Juluca, Apretude and Rukobia), year-end inventory build and favourable net price. New HIV medicines delivered sales of £581 million up >100% at AER, 82% at CER.
Nucala and Benlysta both continued to grow double digits reflecting ongoing strong demand. In Oncology, Zejula continues to be impacted by lower diagnosis and treatment rates and Blenrep sales of £11 million in the quarter reflected the impact of withdrawal from US market in Q4 2022.
Vaccine sales were £988 million, up 16% at AER, 2% at CER. Sales of flu vaccines were strong, including the favourable impact of RAR movements and delivery phasing from Q3, while Shingrix sales reflected expected wholesaler inventory reductions and Established Vaccines sales reflected CDC phasing.
General Medicines sales were £873 million up 6% at AER, down 7% at CER, with continuing Trelegy demand growth, and Flovent continuing to grow. Overall, there was a 14 percentage point reduction in growth of US General Medicines due to prior period RAR adjustments in the quarter.
Europe In Europe, sales were £1,655 million, up 9% at AER, 7% at CER. Sales of COVID-19 solutions in the quarter of £76 million compare with £68 million in Q4 2021, so have minimal impact on total growth in the quarter.
In Specialty Medicines, HIV sales were £344 million up 8% at AER, 6% at CER. The performance predominantly reflected strong patient demand for Dovato with sales of £136 million during the period. Benlysta in immunology, Nucala in respiratory, and the Oncology therapy area all delivered strong double-digit growth in the quarter. Xevudy sales of £19 million in the quarter were down on the corresponding quarter last year reducing total Europe Specialty sales by 11 percentage points at AER and CER.
Vaccine sales were £579 million, up 28% at AER, 26% at CER. Shingrix sales of £204 million, up 76% at AER, 72% at CER, drove the growth on strong commercial execution and new launches uptake partly offset by influenza vaccines lower post-pandemic demand and competitive pressures. Pandemic adjuvant sales of £57 million in the quarter contributed 13 percentage points of growth at AER and CER.
General Medicines sales were £552 million up 1% at AER, and down 1% at CER. Strong demand for Anoro and Trelegy was offset by ongoing generic competitive pressures and the impact of higher government clawback rates.
International International sales were £2,097 million, up 3% at AER and CER. This included a drag of 9 percentage points AER and 10 percentage points CER related to sales of COVID-19 solutions at AER and CER in the corresponding quarter last year.
In Specialty Medicines, HIV sales were £171 million up 23% at AER, 17% at CER driven by Tivicay tender phasing, and strong Dovato growth. Combined Tivicay and Triumeq sales were £125 million, up 16% at AER and 10% at CER. Nucala sales of £68 million grew 24% at AER and 29% at CER reflecting strong market growth and patient uptake. Benlysta sales of £32 million grew 39% at AER and CER reflecting growth in biological market in Japan and inclusion on China's National Reimbursement Drug List.
Vaccine sales were £507 million, flat at AER, down 3% at CER, as a result of a 21 percentage point drag at AER and CER from COVID-19 vaccine adjuvant sales in Q4 2021. Growth excluding COVID-19 solutions was driven by Shingrix post-pandemic sales rebound, strong commercial execution and new launches partly offset by Synflorix lower tender demand.
General Medicines sales were £1,196 million up 5% at AER and CER. Respiratory sales of £530 million were up 14% at AER, 13% at CER including Trelegy sales of £71 million up 42% at AER and CER reflecting strong demand and inclusion on China's National Reimbursement Drug List. Other General Medicines sales of £666 million, were down 1% at AER and flat at CER, reflecting generic competition and price reductions in certain markets offset by strong growth of Augmentin on rebound of the antibiotic market post the pandemic. |
| Operating performance |
| Cost of sales Total cost of sales as a percentage of turnover was 30.3%, 9.0 percentage points at AER and 7.4 percentage points in CER terms lower than Q4 2021.
Adjusted cost of sales as a percentage of turnover was 27.5%, down 9.1 percentage points AER and 7.6 percentage points at CER compared with Q4 2021. This primarily reflected lower sales of lower margin COVID-19 solutions (Xevudy) compared to Q4 2021, reducing cost of sales margin by 5.3 percentage points at AER and CER and lower inventory adjustments and write offs in Vaccines as well as a favourable mix. This was partly offset by increased supply chain costs including the impact of increased commodity prices and freight costs.
Selling, general and administration Total SG&A costs as a percentage of turnover were 33.1%, 2.1 percentage points higher at AER and 2.2 percentage points higher at CER than in Q4 2021 primarily reflected increased investment in the launch of innovative vaccines and medicines partially offset by higher sales.
Adjusted SG&A costs as a percentage of turnover were 33.0%, 4.5 percentage points higher at AER and 4.6 percentage points higher at CER. Adjusted SG&A costs increased 21% at AER, 13% at CER to £2,435 million which primarily reflected an increased level of launch investment in Specialty Medicines particularly HIV and Vaccines including Shingrix to drive post-pandemic recovery demand and support market expansion. The growth in Adjusted SG&A also reflected increased freight and distribution costs. This growth was partly offset by the continuing benefit of restructuring and tight control of ongoing costs.
Research and development Total R&D expenditure was £1,797 million up 31% at AER, 23% at CER. This included amortisation and impairments.
Adjusted R&D expenditure increased in the quarter by 18% at AER and 11% at CER, to £1,522 million. We continue to see increased investment in the Vaccines clinical development portfolio, particularly in our mRNA technology platforms, RSV older adult vaccine candidate and Men ABCWY, our Phase III meningitis programme, as well as in relation to our recent acquisition of Affinivax.
In the Specialty Medicines portfolio, there was increased investment in Jemperli as we ramp up for new phase II/III trials in rectal and colon cancer and in our early-stage immuno-oncology assets. In addition, there was increased investment in our phase III respiratory programme for depemokimab, a potential new medicine to treat severe asthma, and in bepirovirsen, our study in chronic hepatitis B. This quarter also reflects the impact of our recent decision to end our investment in Cell and Gene therapy. These increases in investment were partly offset by decreases related to the completion of several late-stage clinical development programmes and reduced R&D investment in COVID-19 pandemic solutions versus Q4 2021.
Royalty income Royalty income was £206 million (Q4 2021: £137 million), up 50% at AER, 48% at CER, primarily reflecting royalty income from Gilead under the settlement and licensing agreement with Gilead and higher sales of Gardasil.
Other operating income/(expense) Net other operating income was £759 million (Q4 2021: £367 million expense) primarily reflecting fair value gains in investments including £605 million on the retained stake in Haleon and milestone income from disposals. In addition, there was an accounting gain of £3 million (Q4 2021: £612 million accounting charge) arising from the remeasurement of contingent consideration liabilities and the liabilities for the Pfizer, Inc. (Pfizer) put option and Pfizer and Shionogi & Co. Ltd. (Shionogi) preferential dividends in ViiV Healthcare. This included a remeasurement charge of £8 million (Q4 2021: £528 million accounting charge) for the contingent consideration liability due to Shionogi, reflecting the unwinding of the discount for £110 million, offset by a gain of £102 million primarily from exchange rates movement as well as adjustments to sales forecasts.
Operating profit Total operating profit from continuing operations was £1,868 million compared with £492 million in Q4 2021. The increase primarily reflected fair value gains on investments including £605 million on the retained stake in Haleon, milestone income from disposals and lower remeasurement charges for contingent consideration liabilities.
Adjusted operating profit was £1,595 million, up 21% at AER and 5% at CER on a turnover decrease of 3% at CER. The Adjusted operating margin of 21.6% was higher by 3.0 percentage points at AER and 1.5 percentage points at CER than in Q4 2021. This reflected the impact from lower sales of COVID-19 solutions which reduced Adjusted Operating profit growth by approximately 17% at AER, 15% at CER but did not materially impact the Adjusted operating margin. The increase in Adjusted Operating margin reflected lower inventory adjustments and write offs in Vaccines, a favourable mix and higher royalty income, partly offset by increased launch investment in SG&A in Specialty Medicines including HIV and Vaccines.
Contingent consideration cash payments made to Shionogi and other companies reduce the balance sheet liability and hence are not recorded in the income statement. Total contingent consideration cash payments in Q4 2022 amounted to £273 million (Q4 2021: £225 million). These included cash payments made to Shionogi of £257 million (Q4 2021: £211 million).
Adjusted operating profit by business Commercial Operations adjusted operating profit was £3,219 million, up 19% at AER and 8% at CER on a turnover decrease of 3% at CER. The operating margin of 43.6% was 5.5 percentage points higher at AER and 4.0 percentage points higher at CER than in Q4 2021. This primarily reflected lower sales of COVID-19 solutions sales low margin Xevudy and pandemic adjuvant. This also reflected lower inventory adjustments and write offs in Vaccines as well as a favourable mix and higher royalty income. This was partly offset by increased launch investment in SG&A in Specialty Medicines including HIV and Vaccines.
R&D segment operating expenses were £1,512 million, up 18% at AER and 10% at CER, primarily reflecting increased investment in Vaccines including priority investments for mRNA and late stage portfolio and Specialty Medicines in early stage HIV and depemokimab, as well as the impact of our recent decision to end our investment in Cell and Gene therapy. This was partly offset by the completion of several late-stage clinical development programmes, and reduced R&D investment in COVID-19 pandemic solutions compared to Q4 2021.
Net finance costs Total net finance costs were £244 million compared with £187 million in Q4 2021. Adjusted net finance costs were £235 million compared with £186 million in Q4 2021. The increase primarily reflected the net cost associated with the Sterling Notes repurchase in Q4 2022 and higher interest on tax offset by increased interest income due to higher interest rates and larger cash balances as a result of the Consumer Healthcare demerger.
Taxation The charge of £1 million represented an effective tax rate on Total results of 0.1% (Q4 2021: (38.6%)) and reflected the different tax effects of the various Adjusting items. Tax on Adjusted profit amounted to £172 million and represented an effective Adjusted tax rate of 12.6% (Q4 2021: 6.8%).
Issues related to taxation are described in Note 14, 'Taxation' in the Annual Report 2021. The Group continues to believe it has made adequate provision for the liabilities likely to arise from periods that are open and not yet agreed by relevant tax authorities. The ultimate liability for such matters may vary from the amounts provided and is dependent upon the outcome of agreements with relevant tax authorities.
Non-controlling interests The allocation of Total profit from continuing operations to non-controlling interests amounted to £125 million (Q4 2021: £6 million loss). The increase was primarily due to an increased allocation of ViiV Healthcare profits of £124 million (Q4 2021: £8 million loss) including reduced credits for remeasurement of contingent consideration liabilities.
The allocation of Adjusted earnings to non-controlling interests amounted to £149 million (Q4 2021: £109 million). The increase in allocation primarily reflected an increased allocation of ViiV Healthcare profits of £148 million (Q4 2021: £107 million).
Earnings per share from continuing operations Total EPS from continuing operations was 37.2p compared with 10.6p in Q4 2021. The increase primarily reflected higher fair value gains on investments including £605 million on the retained stake in Haleon and lower remeasurement charges for contingent consideration liabilities.
Adjusted EPS was 25.8p compared with 23.6p in Q4 2021, up 10% at AER, down 6% at CER, on a 5% CER increase in Adjusted operating profit primarily reflecting the impact from lower sales of COVID-19 solutions, higher interest costs and a higher effective tax rate compared to Q4 2021.
Profit and earnings per share from discontinued operations Discontinued operations include the Consumer Healthcare business and certain Corporate costs directly attributable to the Consumer Healthcare business. Loss after taxation from discontinued operations amounted to £5 million (Q4 2021: profit of £510 million).
Loss per share from discontinued operations was (0.1)p, compared with EPS of 8.1p in Q4 2021. For further details see page 55, discontinued operations.
Total earnings per share Total EPS was 37.1p compared with 18.7p in Q4 2021. The increase primarily reflected higher fair value gains on investments including on the retained stake in Haleon and lower remeasurement charges for contingent consideration liabilities.
Currency impact on Q4 2022 results The results for Q4 2022 are based on average exchange rates, principally £1/$1.19, £1/€1.15 and £1/Yen 165. Comparative exchange rates are given on page 52. The period-end exchange rates were £1/$1.20, £1/€1.13 and £1/Yen 159.
In Q4 2022, turnover was up 4% at AER and down 3% at CER. Total EPS from continuing operations was 37.2p compared with 10.6p in Q4 2021. Adjusted EPS was 25.8p compared with 23.6p in Q4 2021, up 10% at AER and down 6% at CER. The favourable currency impact primarily reflected the weakening of Sterling against the US Dollar and the euro, partly offset by the strengthening in the Japanese Yen. Exchange gains or losses on the settlement of intercompany transactions had a negligible impact on the sixteen percentage point favourable currency impact on Adjusted EPS. |
| Adjusting items The reconciliations between Total results and Adjusted results for Q4 2022 and Q4 2021 are set out below. |
| Three months ended 31 December 2022 |
| | Total results £m | | Profit from discon- tinued operations £m | | Intangible amort- isation £m | | Intangible impair- ment £m | | Major restruct- uring £m | | Trans- action- related £m | | Divest- ments, significant legal and other items £m | | Adjusted results £m |
| | | | | | | | | | | | | | | | |
| Turnover | 7,376 |
|
|
|
|
|
|
|
|
|
|
|
|
| 7,376 |
| Cost of sales | (2,238) | | | | 147 | | | | 42 | | 10 | | 9 | | (2,030) |
| | | | | | | | | | | | | | | | |
| Gross profit | 5,138 | | | | 147 | | | | 42 | | 10 | | 9 | | 5,346 |
| | | | | | | | | | | | | | | | |
| Selling, general and administration | (2,438) | | | | - | | - | | 3 | | 13 | | (13) | | (2,435) |
| Research and development | (1,797) | | | | 16 | | 240 | | 19 | | | | | | (1,522) |
| Royalty income | 206 | | | | | | | | | | | | | | 206 |
| Other operating income/(expense) | 759 | | | | | | | | (1) | | (17) | | (741) | | - |
| | | | | | | | | | | | | | | | |
| Operating profit | 1,868 |
|
|
| 163 |
| 240 |
| 63 |
| 6 |
| (745) |
| 1,595 |
| | | | | | | | | | | | | | | | |
| Net finance cost | (244) | | | | | | | | 1 | | | | 8 | | (235) |
| Share of after tax losses and joint of associates ventures | 2 | | | | | | | | | | | | | | 2 |
| | | | | | | | | | | | | | | | |
| Profit before taxation | 1,626 |
|
|
| 163 |
| 240 |
| 64 |
| 6 |
| (737) |
| 1,362 |
| | | | | | | | | | | | | | | | |
| Taxation | (1) | | | | (31) | | (54) | | (36) | | (5) | | (45) | | (172) |
| Tax rate % | 0.1% | | | | | | | | | | | | | | 12.6% |
| | | | | | | | | | | | | | | | |
| Profit after taxation from continuing operations | 1,625 |
|
|
| 132 |
| 186 |
| 28 |
| 1 |
| (782) |
| 1,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit after taxation from discontinued operations and other gains/(losses) from the demerger | (5) | | 5 | | | | | | | | | | | | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit after taxation from discontinued operations | (5) |
| 5 |
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Total profit after taxation for the period | 1,620 |
| 5 |
| 132 |
| 186 |
| 28 |
| 1 |
| (782) |
| 1,190 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit attributable to non-controlling interest from continuing operations | 125 | | | | | | | | | | 24 | | | | 149 |
| | | | | | | | | | | | | | | | |
| Profit attributable to shareholders from continuing operations | 1,500 | | | | 132 | | 186 | | 28 | | (23) | | (782) | | 1,041 |
| | | | | | | | | | | | | | | | |
| Profit attributable to non-controlling interest from discontinued operations | - | | | | | | | | | | | | | | - |
| | | | | | | | | | | | | | | | |
| Profit attributable to shareholders from discontinued operations | (5) | | 5 | | | | | | | | | | | | - |
|
| | | | | | | | | | | | | | | |
|
| 1,620 | | 5 | | 132 | | 186 | | 28 | | 1 | | (782) | | 1,190 |
|
| | | | | | | | | | | | | | | |
| Total profit attributable to non-controlling interests | 125 |
| - |
|
|
|
|
|
|
| 24 |
|
|
| 149 |
| | | | | | | | | | | | | | | | |
| Total profit attributable to shareholders | 1,495 |
| 5 |
| 132 |
| 186 |
| 28 |
| (23) |
| (782) |
| 1,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,620 | | 5 | | 132 | | 186 | | 28 | | 1 | | (782) | | 1,190 |
|
| | | | | | | | | | | | | | | |
| Earnings per share from continuing operations | 37.2p | | | | 3.3p | | 4.6p | | 0.7p | | (0.6)p | | (19.4)p | | 25.8p |
| | | | | | | | | | | | | | | | |
| Earnings per share from discontinued operations | (0.1)p | | 0.1p | | | | | | | | | | | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total earnings per share | 37.1p |
| 0.1p |
| 3.3p |
| 4.6p |
| 0.7p |
| (0.6)p |
| (19.4)p |
| 25.8p |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of shares (millions) | 4,034 | | | | | | | | | | | | | | 4,034 |
| | | | | | | | | | | | | | | | |
| Three months ended 31 December 2021(a) |
| | Total results £m | | Profit from discon- tinued operations £m | | Intangible amort- isation £m | | Intangible impair- ment £m | | Major restruct- uring £m | | Trans- action- related £m | | Divest- ments, significant legal and other items £m | | Adjusted results £m |
| | | | | | | | | | | | | | | | |
| Turnover | 7,076 |
|
|
|
|
|
|
|
|
|
|
|
|
| 7,076 |
| Cost of sales | (2,785) | | | | 169 | | | | 18 | | 6 | | | | (2,592) |
| | | | | | | | | | | | | | | | |
| Gross profit | 4,291 | | | | 169 | | | | 18 | | 6 | | | | 4,484 |
| | | | | | | | | | | | | | | | |
| Selling, general and administration | (2,193) | | | | | | | | 138 | | 9 | | 28 | | (2,018) |
| Research and development | (1,376) | | | | 25 | | 64 | | 3 | | | | (1) | | (1,285) |
| Royalty income | 137 | | | | | | | | | | | | | | 137 |
| Other operating income/(expense) | (367) | | | | | | | | | | 591 | | (224) | | - |
| | | | | | | | | | | | | | | | |
| Operating profit | 492 |
|
|
| 194 |
| 64 |
| 159 |
| 606 |
| (197) |
| 1,318 |
| | | | | | | | | | | | | | | | |
| Net finance cost | (187) | | | | | | | | 1 | | | | | | (186) |
| Share of after tax losses and joint of associates ventures | (2) | | | | | | | | | | | | | | (2) |
| | | | | | | | | | | | | | | | |
| Profit before taxation | 303 |
|
|
| 194 |
| 64 |
| 160 |
| 606 |
| (197) |
| 1,130 |
| | | | | | | | | | | | | | | | |
| Taxation | 117 | | | | (46) | | (13) | | (23) | | (78) | | (34) | | (77) |
| Tax rate % | (38.6%) |
|
|
|
|
|
|
|
|
|
|
|
|
| 6.8% |
| | | | | | | | | | | | | | | | |
| Profit after taxation from continuing operations | 420 |
|
|
| 148 |
| 51 |
| 137 |
| 528 |
| (231) |
| 1,053 |
| | | | | | | | | | | | | | | | |
| Profit after taxation from discontinued operations and other gains/(losses) from the demerger | 510 | | (510) |
|