GLAXOSMITHKLINE (NYSE:GSK) Q3 2019 Earnings Conference Call - Final Transcript
Oct 30, 2019 • 08:00 am ET
Good afternoon, ladies and gentlemen, and welcome to the Analyst Call on the GSK Third 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 on our Q3 2019 results, which were issued earlier today. You should have received our press release and can view the presentation on GSK's website so there is not able to view the webcast slides that accompany today's call are located on the Investors section of our website.
Before we begin, please refer to Slide 2 of our presentation for our cautionary statements. Our speakers today are Chief Executive Officer, Emma Walmsley; Iain Mackay, Chief Financial Officer; Luke Miels, President, Global Pharmaceuticals; and Dave Redfern ,Chief Strategy Officer & Chairman of ViiV. Hal Barron, Brian McNamara and Roger Connor are joining us for the Q&A section of the call. We request that you only ask a maximum of two questions. So that everyone has a chance to participate. And with that I will hand the call over to Emma.
Thank you SEF. 2019 is an important year of execution for GSK and I'm pleased that we've made continued good progress this quarter, with growth in sales in constant exchange rates across the Group. Group sales growth of 11% in CER terms or 6% on a pro forma basis 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, with strong growth from our newer respiratory products and Benlysta. Consumer benefited this quarter from the consolidation of the Pfizer Consumer Healthcare business powering sales growth of 25%. On the pro forma basis, the consumer business grew at 3% in line with our expectations. Group adjusted operating margin this quarter was down 2 percentage points on a CER basis, primarily due to the impact of generic competition to Advair in the US, while also substantially increasing investment in R&D and support for new launches. This was partially offset by a strong contribution from Vaccines.
On a total basis, earnings per share declined 1% to GBP0.314, and adjusted earnings per share increased 1% to GBP0.386, reflecting both our operating performance and a lower tax rate. Iain will give you more detail in a moment, but based on this delivery and our outlook, I'm pleased that we're able to again update our 2019 earnings guidance. Our free cash flow year-to-date was GBP2.5 billion in line with our expectations, as guided previously cash flows are weighted to the second half of the year.
This quarter, we've continued to make progress against our priorities for the whole Company with innovation, performance and trust, all to be powered by an ongoing culture change. We've continued to execute on new product launches and have demonstrated strong growth with Nucala and Trelegy in Respiratory and most notably in Vaccines with Shingrix, now expected to