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GlaxoSmithKline Q1 Profit Increases

GlaxoSmithKline plc (GSK.L,GSK) reported that its first-quarter profit attributable to shareholders significantly increased to 1.57 billion pounds from last year's 830 million pounds, reflecting strong operating performance, an increase in the value of the shares in Hindustan Unilever Limited to be received in connection with the disposal of Horlicks and other Consumer Healthcare brands and a reduced effective tax rate. It was partly offset by increased re-measurement charges on the contingent consideration liabilities and put option.

Total earnings per share was 31.5 pence, compared with 16.8 pence in the prior year. Adjusted earnings per share was 37.7 pence compared with 30.1 pence in the prior year, up 25% AER, 26% CER.

Profit before taxation rose 42 percent to 1.84 billion pounds from 1.30 billion pounds in the prior year.

Group turnover was 9.09 billion pounds in the first-quarter, up 19% AER, 19% CER and 10% CER on a pro-forma basis, with growth delivered by all three businesses.

Pharmaceuticals turnover in the quarter was 4.396 billion pounds, up 6% AER, 6% CER. Additional COVID-19 related demand and stock building in Europe and the US had a positive impact on growth. Respiratory sales were up 38% AER, 38% CER to 871 million pounds on growth of Trelegy Ellipta and Nucala.

Vaccines turnover grew 19% AER, 19% CER to 1.805 billion pounds, primarily driven by growth in sales of Shingrix. Meningitis vaccines also contributed to growth, but Established Vaccines declined 3% AER, 3% CER to 912 million pounds.

Reported Consumer Healthcare sales grew 44% AER, 46% CER to 2.862 billion pounds, largely driven by the inclusion of the Pfizer portfolio. Pro-forma sales grew 11% CER and 14% CER excluding brands divested/ under review. Growth was heavily impacted by consumer and government responses to the COVID-19 pandemic.

Based on current assessment of the impact of COVID-19, the company has maintained its adjusted earnings per share guidance for the year at this point, but it will, if needed, update guidance as more information becomes available to inform its expected financial performance for the full-year 2020.

The company provided guidance with respect to expected full-year 2020 Adjusted earnings per share, being a decline in the range of -1% to -4% at CER.

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