GlaxoSmithKline plc (NYSE:GSK) Q1 2019 Earnings Conference Call - Final Transcript
May 01, 2019 • 07:00 am ET
Good afternoon, ladies and gentlemen, and welcome to the Analyst Call on the GSK First Quarter 2019 Results. I will now hand you over to Sarah Elton-Farr, Head of Investor Relations, who will introduce today's session.
Thank you. Good morning and good afternoon. Thank you for joining us for our Q1 2019 results which were issued earlier today. You should have received our press release and can view the presentation on GSK's website. For those not able to view the webcast, slides that accompanies today's call are located on the Investors section of the GSK website.
Before we begin, please refer to slide two of our presentation for our cautionary statements. Our speakers today are CEO, Emma Walmsley; Iain Mackay, CFO; Luke Miels, President, Global Pharmaceuticals; and David Redfern, Chief Strategy Officer and Chairman of Viiv. We have a broader team available for Q&A. We request that you ask only a maximum of two questions so that everyone has a chance to participate.
And with that, I will hand the call over to Emma.
Thanks SEF, and hello, everyone. 2019 is an important year of execution for GSK, and I'm pleased we've made good -- we've made good progress this quarter with growth in sales in constant exchange rates across the group and an improved group margin.
Group sales growth of 5% in CER terms reflected an increase in sales in all three of our global businesses, with a particularly strong performance in vaccines. The pharma business continues to shift its portfolio shape well with strong growth from new launches. And although consumer had a slow quarter, we remain confident and excited about the outlook for this business.
Group adjusted operating margin this quarter was up one percentage point on a CER basis. On a total basis, earnings per share were up 42% to 16.8 pence, and adjusted earnings per share increased 18% to 30.1 pence. Included within operating margin and EPS, there are a number of matters of note that benefited the quarter, and Ian will address these in just a moment. Nonetheless, it's a strong start to the year, and we reaffirm our full-year guidance.
Our free cash flow this quarter was in line with our expectations with GBP165 million, impacted, as you know, by the launch of generic Advair, the phasing of rebates, and higher restructuring charges, all as anticipated.
Two years ago this summer, I laid out my long-term priorities for the whole company; innovation, performance, and trust, all to be powered by a necessary culture change. And we've made a strong start to the focused areas for 2019. We've continued to execute on our new product launches and have demonstrated strong growth with Nucala and Trelegy in respiratory and most notably in vaccines with Shingrix.
Strengthening our pipeline is critical to our long-term success, and we've made good progress here too. In HIV, we've already had good uptake for the first of our two drug regimens, Juluca, and we're now seeing the next wave of important