Vaccine Demand Boosts GlaxoSmithKline's Q2 Sales, Earnings; Maintains FY21 Guidance

GlaxoSmithKline Plc's GSK turnover was £8.1 billion in Q2, up 6% Y/Y (actual exchange rate AER), 15% (constant exchange rate CER).
Pharmaceuticals sales reached £4.2 billion, up 3% AER, 12% CER, driven by strong growth in New & Specialty products, favorable US RAR adjustments, and a prior year comparator impacted by destocking of COVID-19 related first quarter additional demand.
Vaccines sales grew 39% AER, 49% CER to £1.6 billion, primarily driven by pandemic adjuvant sales, higher demand for DTPa-containing vaccines in the US, and higher demand for Bexsero.
Vaccines turnover excluding pandemic vaccines grew 16% AER, 24% CER to £1.3 billion.
Sales of its meningitis vaccine rose 46%, with shots for hepatitis and diphtheria up 28% as traditional hospital and doctor appointments rebounded from the COVID-19 disruption.
Adjusted operating margin of 26.7% was 3.7 percentage points higher at AER and 5.6 percentage points higher on a CER basis than in Q2 2020.
Adjusted EPS was 28.1p, up 46% AER, 71% CER.
The net cash inflow from operating activities was £1.3 billion. The free cash outflow was £316 million.
Outlook: GlaxoSmithKline reaffirmed 2021 adjusted EPS outlook to decline by mid-to-high single-digit percentage at CER.
As Shingrix sales are recovering more slowly in ex-US markets, the Company expects vaccines revenue for 2021 to be broadly flat.
Price Action: GSK shares are down 1.44% at $38.95 during the premarket session on the last check Wednesday.

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