Guidance all at CER and excluding COVID-19 solutions

The Total results are presented in summary above and on page 8 and Core results reconciliations are presented on pages 20 and 23.  Core results are a non-IFRS measure that may be considered in addition to, but not as a substitute for, or superior to, information presented in accordance with IFRS. The following terms are defined on page 60: Core results, £% or AER% growth, CER% growth,COVID-19 solutions, turnover excluding COVID-19 solutions; and other non-IFRS measures. GSK provides guidance on a Core results basis only, for the reasons set out on page 18. All expectations, guidance and targets regarding future performance and dividend payments should be read together with 'Guidance and outlooks, assumptions and cautionary statements' on page 62. (1) Contingent consideration liability is abbreviated to CCL.

2024 Guidance

GSK revises its full-year guidance at constant exchange rates (CER). All guidance, expectations and full-year growth rates exclude any contributions from COVID-19 solutions.

GSK delivered a strong first half 2024 performance with excellent business momentum, including increased sales growth of Specialty Medicines, particularly reflecting successful new launches in Oncology and for long-acting HIV medicines. General Medicines, including Trelegy, also continued to perform better than expected. Sales are now expected to grow between 7 to 9 per cent at CER (previously "upper part of the range of between 5 to 7 per cent increase"). Improved sales performances in Specialty and General Medicines are expected to more than offset lower sales growth of Vaccines this year, which reflects revised recommendations for RSV vaccinations issued in June by the US Advisory Committee on Immunization Practices.

Growth in the second half of 2024 will be impacted by the annualisation of product launches and stocking impacts as compared with the same period last year, particularly in Vaccines and Oncology.

This guidance continues to be supported by the following revised turnover expectations for full-year 2024 at CER:

Core Operating profit is now expected to grow between 11 to 13 per cent at CER (previously 9 to 11 per cent increase), despite a 6 percentage point impact to Operating Profit growth following the loss of the majority of Gardasil royalties effective from the beginning of 2024. SG&A is expected to grow low-single digits, with effective cost control driving operating leverage and further margin improvements. R&D expenditure is expected to increase slightly below sales growth and for royalty income to be around £600 million for the full year.

Core Earnings per share is now expected to increase between 10 to 12 per cent at CER, (previously 8 to 10 per cent increase) reflecting continued higher operating profit with lower net finance costs. Expectations for non-controlling interests remain unchanged relative to 2023, and GSK continues to anticipate an increase in the Core effective tax rate to around 17% for the full year following implementation of new global minimum corporate income tax rules which came into effect from 1 January 2024 in line with the Organisation for Economic Co-Operation and Development 'Pillar 2' model framework.

Additional commentary

Dividend policy

The Dividend policy and the expected pay-out ratio remain unchanged. Consistent with this, and reflecting strong business performance during the quarter, GSK expects to declare a dividend for Q2 2024 of 15p per share and for the full year 2024 60p.

COVID-19 solutions

For the full year 2024, GSK does not anticipate any further COVID-19 pandemic-related sales or operating profit. Consequently, and in comparison to 2023, it is anticipated that the full year growth in sales and Core operating profit will be adversely impacted by one and two percentage points, respectively.

Exchange rates

If exchange rates were to hold at the closing rates on 30 June 2024 ($1.27/£1, €1.18/£1 and Yen 203/£1) for the rest of 2024, the estimated impact on 2024 Sterling turnover growth for GSK would be -4% and if exchange gains or losses were recognised at the same level as in 2023, the estimated impact on 2024 Sterling Core Operating Profit growth for GSK would be -6%.

Results presentation

A conference call and webcast for investors and analysts of the quarterly results will be hosted by Emma Walmsley, CEO, at 12 noon BST (US ET at 7am) on 31 July 2024. Presentation materials will be published on www.gsk.com prior to the webcast and a transcript of the webcast will be published subsequently.

Notwithstanding the inclusion of weblinks, information available on the company's website, or from non GSK sources, is not incorporated by reference into this Results Announcement.

In Q2 2024, Vaccine sales growth was driven by increased demand for Meningitis vaccines and uptake of Arexvy in the US in line with expected waning seasonal demand. Shingrix grew YTD but declined in the quarter as channel inventory reductions, changes in retail vaccine prioritisation and lower demand in the US more than offset growth in International and Europe. Both the quarter and YTD growth comparators were adversely impacted due to COVID-19 solution sales in 2023.

Sales of Shingrix, a vaccine against herpes zoster (shingles), declined in the quarter, while continuing to grow YTD.

In the US, sales in the quarter decreased by 36% at AER and CER reflecting channel inventory reductions and changes in retail vaccine prioritisation in part due to a transition to a new CMS(1) rule that changed how pharmacies process reimbursements from payers. In addition lower demand was driven by challenges activating harder-to-reach consumers which remains a priority with the US cumulative immunisation penetration rate at the end of Q1 2024 reaching 37% of the more than 120 million US adults(2) currently recommended to receive Shingrix, up six percentage points(3) since the end of Q1 2023.

Shingrix grew significantly in International in the quarter and YTD, driven by a national immunisation programme in Australia and regional funding in Japan together with supply to our co-promotion partner in China despite phasing of some expected sales into Q3. In Europe, Shingrix grew in the quarter and YTD from expanded public funding, partly offset by declining demand in Germany. Markets outside the US now represent 64% of Q2 2024 global sales (Q2 2023: 46%), with Shingrix launched in 45 countries. The majority of these markets have average cumulative immunisation rates below 5%.

Footnotes:

Benlysta, a monoclonal antibody treatment for Lupus, continues to grow consistently in Q2 2024, representing strong demand and volume growth in US, European and International regions, with bio-penetration rates having increased across many markets.

In Q2 2024, Oncology sales growth increased driven by strong patient growth for Zejula, a PARP(1), Jemperli, a PD-1(2) blocking antibody, and Ojjaara/Omjjara, a daily JAK1/JAK2 and ACVR1(3) inhibitor. Jemperli, a medicine for front-line treatment in combination with chemotherapy for patients with dMMR/MSI-H primary advanced or recurrent endometrial cancer, continued to grow strongly and delivered sales of £108 million in the quarter. Ojjaara/Omjjara, a treatment for myelofibrosis patients with anaemia, launched in the US in Q3 2023 and in the UK and Germany in Q1 2024, has seen strong uptake since launch and delivered £85 million of sales in the quarter.

Zejula delivered continued double-digit sales growth in the quarter and YTD, with strong performances across all regions. Growth globally was sustained with increased patient demand and higher volumes, further enhanced by positive price impacts in the US including impacts from launch of the tablet formulation in the US in Q3 2023.

Sales include contributions from both the Respiratory and Other General Medicine portfolios. In Q2 2024, sales growth increased primarily driven by Trelegy, a chronic obstructive pulmonary disease (COPD) and asthma medicine, with strong demand across all regions and pricing benefits from channel and segment mix and adjustments to returns and rebates in the US. Performance was adversely impacted by the removal of the Average Manufacturer Price (AMP) cap on Medicaid drug prices in the US. This removal impacted Advair, Flovent, and Lamictal due to significant pricing reductions, reduced commercial contracting, and the decision to discontinue branded Flovent. However, this has been fully offset by the increased use of authorised generic versions of Advair and Flovent while, significantly, continuing to provide access to patients.

In Q2 2024 and YTD, sales growth reflected Trelegy's strong performance in all regions and the increased demand for Anoro, particularly in Europe and International. Seretide/Advair and other respiratory declined due to the impact of continued generic erosion in Europe and International markets. As mentioned above, in the US adverse impacts from the removal of the AMP cap were fully offset by the increased use of authorised generic versions of Advair and Flovent, providing access to medicines for patients.

Trelegy is the most prescribed single inhaler triple therapy (SITT) treatment worldwide for COPD and asthma. In Q2 2024 sales growth further increased with strong growth across all regions, reflecting patient demand, single-inhaled triple therapy class growth, and increased market share. Around half of the growth in the quarter was driven by price benefit from channel and segment mix as well as adjustments to returns and rebates.

Seretide/Advair is a combination treatment used to treat asthma and COPD. In Q2 2024, the decrease in sales reflected continued generic erosion from competitor products in Europe and International. Broadly stable performance in the US reflected impacts of the removal of the AMP cap on Medicaid drug prices in the US on branded Advair, offset by the increased use of authorised generic versions.

The performance in Q2 2024 and YTD was adversely impacted by ongoing generic competition globally, and continued impacts to Lamictal's performance in the US from the removal of the AMP cap on Medicaid drug prices. This performance was partially offset by increased antibiotic growth in International markets.

Footnotes:

By Region

Vaccine sales decreased in Q2 2024 driven by Shingrix reflecting channel inventory reductions, changes in retail vaccine prioritisation and lower demand driven by challenges activating harder-to-reach customers which remains a priority. In addition, adverse CDC stockpile movements impacted Established Vaccines. This was partly offset by Arexvy continued uptake and leading market share. YTD performance also reflected the strong Shingrix comparator of 2023.

In Q2 2024, sales growth of Specialty Medicines increased, following adverse inventory channel impacts in Q1 2024 in Nucala and Benlysta in the US. Specialty Medicines continued to grow YTD driven by Oncology and HIV performance and continued growth in Nucala and Benlysta.

General Medicine's growth in Q2 2024 and YTD was primarily driven by increased demand for Trelegy, with strong volume growth driven by patient demand, growth of the SITT market, and price benefits from channel mix and adjustments to returns and rebates. Performance continues to be impacted following the removal of the AMP cap on Medicaid drug prices, which particularly impacted Advair, Flovent and Lamictal. However this was fully offset by the increased use of authorised generic versions of Advair and Flovent, providing access to medicines for patients.

In Q2 2024 and YTD, Vaccine sales growth excluding COVID-19 solutions reflected Shingrix growth across several markets following public funding expansion and Bexsero recommendation in Germany partly offset by lower Shingrix demand in Germany and decreased tender sales for Established Vaccines and Bexsero.

Specialty Medicines sales grew in the quarter and YTD by a double-digit percentage due to the performance in Oncology, Benlysta in immunology, and Nucala in respiratory including the impact of new indication launches. HIV growth continued in the quarter and YTD at a high single digit percentage.

General Medicines sales were broadly stable in the quarter and YTD, reflecting strong growth in Trelegy and Anoro, offset by a decrease in other respiratory medicines.

In Q2 2024, sales excluding COVID-19 solutions increased 8% at AER and 14% at CER, which reflected year-on-year exchange movements in several International markets compared to Q2 2023.

Vaccines' double-digit growth in Q2 2024 and YTD was driven by the expansion of public funding for Shingrix in Australia and Japan and supply to our co-promotion partner in China together with increased supply and higher demand for Established vaccines.

Specialty Medicine's double-digit growth in the quarter and YTD was driven by HIV, Nucala in Respiratory, Benlysta in Immunology, and Zejula in Oncology.

General Medicines sales grew low single digit percentage in the quarter and YTD, with Trelegy and Antibiotics delivering growth offset by a decrease in other respiratory medicines.

In Q2 2024 the other operating expense reflected a charge of £378 million (Q2 2023: £189 million credit) arising from the remeasurement of contingent consideration liabilities (CCL) primarily reflecting improved longer term HIV prospects and foreign currency movements, an increase in liability for the Vaccines CCL, and the liabilities for the Pfizer, Inc. (Pfizer) put option. In addition, there was a fair value loss of £35 million (Q2 2023: £35 million gain) on the retained stake in Haleon plc (Haleon), partly offset by higher other net income of £95 million (Q2 2023: £54 million). All of the remaining shares held in Haleon were sold in May 2024.

The year to date other operating expense reflected a charge of £1,063 million (YTD 2023: £460 million credit) arising from the remeasurement of CCLs primarily reflecting improved longer term HIV prospects and foreign currency movements and increase in liability for the Vaccines CCL and the liabilities for the Pfizer put option. This was partly offset by a fair value gain of £22 million (YTD 2023: £29 million loss) on the retained stake in Haleon, as well as higher other net income of £190 million (YTD 2023: £144 million).

Total operating profit margin was lower in Q2 2024 primarily due to unfavourable movements in the ViiV Healthcare CCL reflecting improved longer term HIV prospects and foreign currency movements, an increase in liability for the Vaccines CCL and a fair value loss on the retained stake in Haleon (Q2 2023 fair value gain), partly offset by higher other net income. The year to date also has unfavourable movements in CCL remeasurements, partly offset by a fair value gain on the retained Haleon shares (2023 year to date fair value loss) and higher other net income.

Core operating profit in the quarter and year to date benefitted from continued leverage from strong sales and favourable product and regional mix. This was partly offset by increased investment in R&D and growth assets, and lower royalty income. The year to date also includes a favourable impact from the reversal of the legal provision taken in Q1 2023 for the Zejula royalty dispute, following a successful appeal. The adverse impact of lower sales of COVID-19 solutions was three percentage points of Core operating profit growth in the quarter and six percentage points year to date, with minimal impact on Core operating profit margin.

The decrease in net finance costs in Q2 2024 and year to date was mainly driven by lower interest on short-term financing as a result of cash received from the successful disposal of all Haleon shares and savings from maturing bonds, partly offset by higher lease interest expense. Year to date also benefitted from the net cost of bond buybacks completed in Q1 2023.

The effective tax rate on Total results reflects the different tax effects of the various Adjusting items included in Total results.

The effective tax rate on Core profits is broadly in line with expectations for the year and includes the impact of new global minimum corporate income tax rules which came into effect from 1 January 2024 in line with the OECD's 'Pillar 2' model framework. Issues related to taxation are described in Note 14, 'Taxation' in the Annual Report 2023. 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.

The increase in Total profit allocated to NCIs in the quarter was primarily driven by higher net profits in some of the Group's other entities. The decrease in the year to date Total profit allocated to NCIs was driven by lower ViiV Healthcare Total profits (including the remeasurement loss on the CCL) with an allocation of £150 million (YTD 2023: £267 million), partly offset by higher net profits in some of the Group's other entities.

The increase in Core profit from operations allocated to NCIs in Q2 2024 and year to date primarily reflected higher core profit allocations from ViiV Healthcare, with £161 million in the quarter (Q2 2023: £136 million) and £308 million in the year to date (YTD 2023: £256 million), as well as higher net profits in some of the Group's other entities with NCIs.