Total, Continuing and Adjusted results
Total
reported results represent the Group’s overall performance
including discontinued operations. Continuing results represents
performance excluding discontinued operations. GSK also uses a
number of adjusted, non-IFRS, measures to report the performance of
its business. Adjusted results and other non-IFRS measures may be
considered in addition to, but not as a substitute for or superior
to, information presented in accordance with IFRS. Adjusted results
are defined on page 19 and other non-IFRS measures are defined
below and are based on continuing operations.
Free cash flow from continuing operations
Free
cash flow is defined as the net cash inflow/outflow from continuing
operating activities less capital expenditure on property, plant
and equipment and intangible assets, contingent consideration
payments, net finance costs, and dividends paid to non-controlling
interests, contributions from non-controlling interests plus
proceeds from the sale of property, plant and equipment and
intangible assets, and dividends received from joint ventures and
associates (all attributable to continuing operations). It is used
by management for planning and reporting purposes and in
discussions with and presentations to investment analysts and
rating agencies. Free cash flow growth is calculated on a reported
basis. A reconciliation of net cash inflow from continuing
operations to free cash flow from continuing operations is set out
on page 44.
Free cash flow conversion
Free
cash flow conversion is free cash flow from continuing operations
as a percentage of profit attributable to shareholders from
continuing operations.
Working capital
Working
capital represents inventory and trade receivables less trade
payables.
CER and AER growth
In
order to illustrate underlying performance, it is the Group’s
practice to discuss its results in terms of constant exchange rate
(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. CER% represents growth at constant exchange rates. £%
or AER% represents growth at actual exchange rates.
Total Net debt
Net
debt is defined as total borrowings less cash, cash equivalents,
liquid investments, and short-term loans to third parties that are
subject to an insignificant risk of change in value.
Discontinued operations
Consumer
Healthcare was presented as a discontinued operation from Q2 2022.
The demerger of Consumer Healthcare was completed on 18 July 2022.
The Group Income Statement and Group Cash Flow Statement
distinguish discontinued operations from continuing
operations.
Share Consolidation
Following
completion of the Consumer Healthcare business demerger on 18 July
2022, GSK plc Ordinary shares were consolidated to maintain share
price comparability before and after demerger. Shareholders
received 4 new Ordinary shares with a nominal value of 31¼
pence each for every 5 existing Ordinary shares which had a nominal
value of 25 pence each. Earnings per share, diluted earnings per
share, adjusted earnings per share and dividends per share were
retrospectively adjusted to reflect the Share Consolidation in all
the periods presented.
Earnings per share
Earnings
per share has been retrospectively adjusted for the Share
Consolidation on 18 July 2022, applying a ratio of 4 new Ordinary
shares for every 5 existing Ordinary shares.
Total Earnings per share
Unless
otherwise stated, Total earnings per share refers to Total basic
earnings per share.
Total Operating Margin
Total
Operating margin is Total operating profit divided by
turnover.
COVID-19 solutions
COVID-19
solutions include the sales of pandemic adjuvant and other COVID-19
solutions including vaccine manufacturing and Xevudy
and the associated costs but does not include reinvestment in
R&D. This categorisation is used by management and we believe
is helpful to investors through providing clarity on the results of
the Group by showing the contribution to growth from COVID-19
solutions.
Turnover excluding COVID-19 solutions
Turnover
excluding COVID-19 solutions excludes the impact of sales of
pandemic adjuvant within Vaccines and Xevudy
within Specialty Medicines related to the COVID-19 pandemic.
Management believes that the exclusion of the impact of these
COVID-19 solutions sales aids comparability in the reporting
periods and understanding of GSK’s growth including by region
versus prior periods and also 2024 Guidance which excludes any
contributions from COVID-19 solutions.
General Medicines
General
Medicines are usually prescribed in the primary care or community
settings by general healthcare practitioners. For GSK, this
includes medicines for inhaled respiratory, dermatology,
antibiotics and other diseases.
Specialty Medicines
Specialty
Medicines are typically prescription medicines used to treat
complex or rare chronic conditions. For GSK, this comprises
medicines for infectious diseases, HIV, Oncology,
Respiratory/Immunology and Other.
Percentage points
Percentage
points of growth which is abbreviated to ppts.
Non-controlling interest
Non-controlling
interest is the equity in a subsidiary not attributable, directly
or indirectly, to a parent.
RAR (Returns and Rebates)
GSK
sells to customers both commercial and government mandated
contracts with reimbursement arrangements that include rebates,
chargebacks and a right of return for certain pharmaceutical
products principally in the US. Revenue recognition reflects
gross-to-net sales adjustments as a result. These adjustments are
known as the RAR accruals and are a source of significant
estimation uncertainty and fluctuation which can have a material
impact on reported revenue from one accounting period to the
next.
Risk adjusted sales
Pipeline
risk-adjusted sales are based on the latest internal estimate of
the probability of technical and regulatory success for each asset
in development.
Compound annual growth rate (CAGR)
CAGR is
defined as the compound annual growth rate and shows the annualised
average rate for growth in sales and adjusted operating profit
between 2021 to 2026, assuming growth takes place at an
exponentially compounded rate during those years.
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