GSK : Q1 2024 pre announcement aide memoire

Q1 2024 Pre-Announcement Aide Memoire

Issued: Friday 12 April 2024

Disclaimer: GSK has prepared this Q1 2024 pre-announcementaide-memoire per our standard prior practice. It includes statements made in previous public communications by GSK as extracted from their original source and, therefore, by definition, they should only be taken as speaking as at the date they were initially made, and they do not reflect subsequent or recent events, circumstances, or developments. Any updates to these and other previously made statements would only be included in further communications by GSK to the market and the inclusion of the extracted statements herein should not be taken to indicate that they will not be updated in the future.

Please read the assumptions and cautionary statements regarding forward-looking statements set out on page 317 of the Annual Report 2023 and "Guidance and outlooks, assumptions and cautionary statements" on pages 54 and 55 of the Q4 2023 results release. Please read the definitions and reconciliations for non-IFRS measures on pages 20, 21, 23, 24 and 53 of the Q4 2023 results release and the annual report on Form 20-F for FY 2023.

From Q1 2024, GSK has made one update to its reporting framework which is to change the description of 'Adjusted' results to 'Core' results to align with the industry. GSK believes this provides more clarity in describing our operational performance. There is no change to 'Total' Results or definition of the 'Adjusting' items.

Full-year 2024 guidance

Commentary from Q4 2023 stock-exchange announcement (pages 1-3)

GSK provides its full-year 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 5 to 7 per cent.
• Adjusted operating profit is expected to increase between 7 to 10 per cent (absorbing the loss of Gardasil royalties impacting 6 percentage points of profit growth in 2024).
• Adjusted earnings per share is expected to increase between 6 to 9 per cent (an increase in the adjusted effective tax rate to around 17% following implementation of a global minimum corporate income tax rate aligned with the Organisation for Economic Co-Operation and Development 'Pillar
  2' initiative).

Key information for Q1 2024

Foreign exchange

We expect that the negative impact of foreign exchange on Q1 2024 sales will be around -5%. As a result of the mix of currency movements relative to the combination of costs, we expect that the negative impact of foreign exchange on Q1 2024 sterling adjusted operating profit will be more significant than the negative impact on sales.

Weighted average number of shares (WANS)

The basic WANS in Q1 2024 was 4,069m (an increase of 0.6% relative to 4,044m in Q1 2023).

The information below includes commentary from recent circulars, stock-exchange announcements, investor/analyst calls, and previously published outlook statements.

2024 COVID-19 solutions expectations

Commentary from Q4 2023 stock-exchange announcement (page 2):

For the full year 2024, GSK does not anticipate any further COVID-19pandemic-related sales or operating profit. The adverse impact of lower sales of COVID-19 solutions in 2024 is anticipated to be one percentage point of growth in sales and two percentage points in Adjusted operating profit.

Q1 2024 Pre-Announcement Aide Memoire

Issued: Friday 12 April 2024

Impact of COVID-19 solutions on Q1 2023 Adjusted results

Note that in Q1 2023 COVID-19 solutions sales totalled £132m comprising Xevudy (£31m) and pandemic vaccines (£101m). For Xevudy, GSK books all sales and pays a 72.5% profit share through COGS.

Sales (excluding COVID-19 solutions)

2024 full-yearguidance: Turnover is expected to increase between 5 to 7 per cent at CER.

Vaccines

2024 full-yearoutlook: Sales are expected to increase high single-digit to low double-digit per cent at CER.

Shingrix

Commentary at Q4 2023: We continue to expect strong growth for Shingrix this year and to deliver more than £4bn in peak-year sales. In the US, our immunisation rate is 35% in those people 50 years and older, which means close to 80 million people who are eligible are unvaccinated, with more than 4 million people joining this cohort each year. We expect 2024 growth to be driven outside the US, where the vaccine is now approved in 39 countries, most of which have less than 4% penetration, and we're really excited about our new partnership with Zhifei in China.

Considerations for 2024: In October 2023, we announced a deal with Zhifei to co-promoteShingrix in China GSK and Zhifei announce exclusive strategic vaccine partnership in China | GSK.Subject to the terms of the agreement, Zhifei will purchase agreed volumes of Shingrix with a value to GSK of £2.5 billion in total over the initial three-year period. Under the agreement there is an agreed procurement minimum of ~£0.4bn in 2024.

Comment on 2023 Shingrix sales in China: Please note that 2023 sales were £0.2bn.

Commentary on Shingrix China Phasing in 2024: One thing to keep in mind with revenue recognition in China next year is driven by shipment, so there will be a bolus which is between 60-80%,depending on how much we ship, which will be recognised in Q2, so that is just one watch-out.

Arexvy

Commentary at Q4 2023: The Arexvy launch has been exceptional, and we expect good growth this year mainly driven by further penetration in the US, but also early adoption from the international rollout of the vaccine. We are currently approved in 39 countries. And in the US, our choice to emphasise our 94.6% efficacy in the co-morbid population continues to resonate well. Script data shows strong brand preference - and market data tells us that two out of three HCPs prefer Arexvy. And we continue to have a strong position with all major pharmacies as we start 2024. Looking into this year, we have a major opportunity, subject to approval and ACIP recommendation, with a potential label for at-risk individuals in the 50 to 59 year old cohort - this is around 15 million people. On other dynamics for this year, we know we are facing a more competitive environment and, of course, we won't benefit from launch-stocking. We will also start to see how seasonality affects use patterns for Arexvy.

Q1 2024 Pre-Announcement Aide Memoire

Issued: Friday 12 April 2024

Comment on 2023 Arexvy sales in US: In 2023 wholesaler and retailer inventory build accounted for around 20% of Shingrix ex-factory sales.

RSV activity in the US is tracked by the CDC.RSV Surveillance Data - NREVSS | CDC

Meningitis

Commentary at Q1 2023: Strong growth in Meningitis vaccines was primarily driven by Bexsero, our vaccine against meningitis B, which grew in Europe mainly from inclusion in National Immunisation Programmes and in International due to an increase in demand ahead of an anticipated price increase. Menveo, our vaccine against meningitis strains ACWY, grew in the US primarily due to initial public stocking of the new liquid formulation and Center for Disease Control (CDC) purchasing patterns.

Established Vaccines

Commentary at Q1 2023: Established Vaccines grew mainly in Hepatitis vaccines resulting from continued travel market recovery in Europe and International, and due to CDC purchasing patterns in the US. Rotarix, a vaccine to protect infants against rotavirus, grew in the US primarily driven by initial stocking of the new liquid formulation by the CDC. Synflorix, our 10-valent vaccine for pneumococcal disease, declined in the quarter reflecting phasing of public market supply and lower demand related to decreased birth cohorts in International.

COVID immunisation progress in the US is tracked by the CDC. For US COVID vaccine demographics, including adoption by age, you can visit: https://covid.cdc.gov/covid-data-tracker/#vaccination-demographic

Specialty Medicines

2024 full-yearoutlook: Sales are expected to increase low double-digit per cent at CER

HIV

2024 full-yearoutlook: Sales are expected to increase high single-to-low double digit per cent at CER.

Respiratory/Immunology and Other

Commentary at Q4 2023: Benlysta: Q4 2023 growth acceleration to 25% driven by US performance coupled with the impacts of channel inventory build, uplifted the full year growth to 19%.

Oncology

Commentary at Q4 2023: In Oncology, we were very pleased with the strong uptake for Ojjaara. We're also seeing increasing use of Jemperli and Zejula, in patients with endometrial and ovarian cancers, driven by generation of compelling data and launch of new patient-valued formulations.

General Medicines

2024 full-yearoutlook: Sales are expected to decrease mid-single-digit per cent at CER.

Commentary at Q4 2023: Overall, we expect Gen Meds to decrease mid-single digit per cent in 2024. This guidance takes into account the AMP Cap removal in the US, which we previously highlighted as impacting the business by up to $700 million dollars. We provided for around 20% of this in 2023. And continue to expect a broadly flat outlook between 2021 and 2026.

Q1 2024 Pre-Announcement Aide Memoire

Issued: Friday 12 April 2024

Note: On 1 January 2024, GSK cut the list prices by up to 70% on Advair, up to 48% on Lamictal and 10% for Valtrex. Effective 1 January 2024, GSK discontinued manufacturing branded Flovent HFA (all strengths) and branded Flovent Diskus (all strengths) for the US market. We launched an authorised generic for Flovent HFA (inhalation aerosol) in May 2022 and for Flovent Diskus (inhalation powder) in October 2023.

Financials (adjusted)

Operating profit (excluding COVID-19 solutions)

2024 full-yearguidance: Adjusted operating profit is expected to increase between 7 to 10 per cent.

Q4 2023 commentary on guidance: Adjusted Operating profit is expected to grow between 7 to 10 per cent at CER, despite a 6 percentage point impact to Operating Profit growth following the loss of Gardasil royalties effective from the beginning of 2024. GSK expects to deliver leverage at a gross margin level due to improved product mix from Vaccines and Specialty Medicines growth and continued operational efficiencies. In addition, GSK anticipates further leverage in Operating Profit due to a step down in SG&A growth to a low single-digit increase. R&D is expected to increase broadly in line with sales to support growth of the pipeline.

Commentary on COVID-19solutions impact in Q1 2023. COVID solutions contributed £118m / 6% of 2023 Q1 adjusted operating profit. For the full year 2024, GSK does not anticipate any further COVID-19pandemic-related sales or operating profit. The adverse impact of lower sales of COVID-19 solutions in 2024 is anticipated to be one percentage point of growth in sales and two percentage points in Adjusted operating profit.

Cost of goods sold

2024 full-yearoutlook: GSK expects to deliver leverage at a gross margin level due to improved product mix from Vaccines and Specialty Medicines growth and continued operational efficiencies.

SG&A

2024 full-yearoutlook: Anticipated to increase low single-digit per cent at CER.

2024 consideration: (Commentary from Julie Brown on Q4 2023 Investors and Analysts call)

We have been in an investment cycle, supporting our newly launched vaccines and medicines, and we now expect to move to a period of delivering increasing returns on our investment. In this new cycle, we expect a step down in SG&A growth to a LSD%, improving productivity and providing margin leverage, whilst remaining competitive. We will continue to invest for growth, as established in our capital allocation framework, and we will continue to build a strong R&D pipeline for the longer-term.

Commentary at Q1 2023: Growth in Total and Adjusted SG&A primarily reflected an increase in legal provisions primarily relating to the Zejula royalty dispute resulting in an increase of 4 pptsand 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.

R&D

2024 full-yearoutlook: Expected to increase broadly in line with sales to support pipeline growth.

Q1 2024 Pre-Announcement Aide Memoire

Issued: Friday 12 April 2024

Royalty income

2024 full-yearoutlook: Expected to be £500-£550 million, with minimal Gardasil royalties (2023 £472m). The two largest remaining royalty streams are Biktarvy (3% royalty on US sales until October 2027) and Kesimpta (tiered royalties up to 12%).

Associates

2024 Full-yearoutlook: Expected to be negligible.

Net Interest payable

2024 Full-yearoutlook: slightly lower than 2023 (£669m).

Tax

2024 full-yearoutlook: Adjusted Tax rate expected to be around 17% (2023 15.5%).

2024 consideration: GSK anticipates, as previously communicated, an increase in the adjusted effective tax rate to around 17% following implementation of a global minimum corporate income tax rate aligned with the Organisation for Economic Co-Operation and Development 'Pillar 2' initiative.

2024 full-yearoutlook: Expected to increase between 6 to 9 per cent.

Commentary on COVID-19solutions impact in Q1 2023. COVID solutions contributed 2.5p / 7% of 2023 Q1 adjusted EPS. For the full year 2024, GSK does not anticipate any further COVID-19pandemic-related sales or operating profit. The adverse impact of lower sales of COVID-19 solutions in 2024 is anticipated to be one percentage point of growth in sales and two percentage points in Adjusted operating profit.

Q1 2024 Pre-Announcement Aide Memoire

Issued: Friday 12 April 2024

Dividend

The expected dividend for 2024 is 60p.

1paid prior to the demerger of Consumer Healthcare which was completed on 18 July 2022.

2The actual dividend amount is determined by the Board of Directors with the FY 2024 results.

Summary of Outlooks presented at Q4 2023

Below is slide 7 from the Conference call and webcast for investors and analysts at our Full-year and Q4 2023 results on 31 January 2024.

Q1 2024 Pre-Announcement Aide Memoire

Issued: Friday 12 April 2024

To illustrate underlying performance, it is the Group's practice to discuss its results in terms of CER growth. This represents growth calculated as if the exchange rates used to determine the results of overseas companies in Sterling had remained unchanged from those used in the comparative period. All commentaries are presented in terms of CER growth unless otherwise stated.