GlaxoSmithKline Q3 Adj. Operating Profit Rises, Turnover Up 10% CER; Improves Full Year EPS Guidance

GlaxoSmithKline PLC (GSK.L,GSK) said the Group has delivered another quarter of strong business performance, with double-digit sales growth in Pharmaceuticals and Vaccines, increased momentum in Consumer Healthcare, and continued discipline on costs. Adjusted operating profit was 16% higher at CER on a turnover increase of 10% CER. The company said the increase primarily reflected leverage of pandemic sales, strong growth in New and Specialty Products and favourable prior period RAR adjustments in Pharmaceuticals, continued tight control of ongoing costs and benefits from continued restructuring.

Looking forward, GSK improved its full-year 2021 guidance. The Group also reconfirmed its expectation for meaningful improvement in revenues and margins in 2022. GSK noted that it continues to make excellent progress towards demerger in mid-2022.

The Board has declared a third interim dividend of 19 pence per share. The Board currently plans to maintain the dividend for 2021 at the current level of 80 pence per share.

Third quarter adjusted operating profit was 2.87 billion pounds, 8% higher than a year ago at AER, 16% higher at CER. Adjusted earnings per share was 36.6 pence, compared to 35.6 pence.

Profit attributable to shareholders declined to 1.17 billion pounds from 1.24 billion pounds, prior year. Total earnings per share was 23.3 pence, compared to 25.0 pence.

Third quarter Group turnover was 9.08 billion pounds, up 5% AER, 10% CER. Sales of COVID-19 solutions contributed approximately 2 percentage points to total growth in the quarter. Pharmaceutical turnover was 4.40 billion pounds, up 5% AER, 10% CER.

Vaccines turnover grew 7% AER, 13% CER to 2.17 billion pounds, primarily driven by higher Shingrix sales in the US and Europe and pandemic adjuvant sales. Excluding pandemic vaccines, vaccines turnover grew 2% AER, 8% CER to 2.08 billion pounds.

GSK now expects 2021 adjusted earnings per share to decline by between 2% to 4% at CER, excluding any contribution from COVID-19 solutions. This represents an improvement to that previously given in July of an expected decline of mid to high-single digit percent adjusted EPS at CER.

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