GSK: Good Results, Pipeline Upgrades, Cash Curve Mixed YTD

GSK (GSK LN) 4Q23 results this morning are good with short- and mid-term upgrades to outlook. Credit has been mixed YTD, net debt is lower at Dec-23.

• Turnover was GBP8.05bn (+15% y/y ex-FX, consensus: 7.66bn), adjusted operating profit is GBP1.75bn (+21% y/y ex-FX, cons: 1.79bn). So a revenue beat but a tiny miss on profit. Adj EPS is 28.9p (+25% y/y ex-FX) marginally below 30p consensus.
• More importantly, there are pipeline upgrades in here: 2024 turnover seen at 5-7% (consensus was 4.7% on the base that’s just been beaten today) and adjusted EPS growth of 6-9% (was 2%). The longer-term outlook (to 2026) also looks positive.
• Net debt is GBP15.0bn, down from 17.6bn at Sep-23, helped by net divestments and good operating cash flow. There’s little new on M&A or payout intentions to spook credit investors here.

Overall, a positive set of figures with upgrades to please the equity holders and good operating cash flow for credit investors. The cash curve has been mixed YTD without a specific pattern but most of the senior unsecured curve has tightened in the last week (+3.9 to -15.3bp).

Conf call 1100 London time at https://events.zoom.us/ev/AnW7Ucnwxfjse8FWex8I9AjUbe0W75Er1dgKDLYnoOccYj6QTbO3~AvDsaKSduWQcnY_-gPySEZbbHXJdCjm-prObozH2g0j_jjew5vLBsGgjzQ