The breadth and mix of GSK's product and geographic portfolio is helping the Group to mitigate economic volatility. In the quarter, underlying and reported sales grew 6% and 3% respectively, reflecting growth across all three areas of our business - Pharmaceuticals, Vaccines and Consumer Healthcare. Total Group turnover for Q3 2011 increased 3% to £7,104 million, with Pharmaceuticals and Vaccines turnover up 3% to £5,775 million (Pharmaceuticals up 1% to £4,633 million and Vaccines up 14% to £1,142 million). Consumer Healthcare sales increased 5% to £1,329 million.
The decline in sales of pandemic related products, Avandia and Valtrex as expected had a negative impact on reported Pharmaceuticals and Vaccines sales growth in all regions in the quarter. The quarter-on-quarter negative impact on reported growth related to these products was significantly lower in Q3 than in the first half of 2011. Sales of these products declined by £129 million from £241 million in Q3 2010 to £112 million in Q3 2011 compared with a decline of £1,459 million from £1,727 million in H1 2010 to £268 million in H1 2011. Total sales for these products in Q4 2010 were £317 million.
Excluding these three factors, underlying sales growth for the Group was 6% in the quarter, driven by strong growth in Vaccines (+21%) and a broad based contribution from Pharmaceuticals (+2%) and Consumer Healthcare (+5%). Vaccines was particularly strong in the quarter, reflecting some phasing benefits, principally relating to sales of Cervarix for the roll-out of Japan’s national HPV programme.
This performance was achieved despite the impact of pricing pressures in many markets. The impact of European austerity price cuts and US Healthcare Reform measures together reduced Group sales by approximately £71 million (1 percentage point of growth) this quarter.
Operating profit in the quarter grew 3% in line with sales growth. The growth in operating profit in Vaccines and Consumer Healthcare more than offset a small decline in Pharmaceuticals.
Chief Executive Officer's review presents: "Today's results show that we are delivering on our strategy to generate sustainable sales growth, enhance cash generation and improve returns to shareholders.
"For the quarter, we delivered underlying and reported sales growth of 6% and 3% respectively, reflecting growth across all three areas of our business - Pharmaceuticals, Vaccines and Consumer Healthcare. Vaccines was particularly strong in the quarter, reflecting some phasing benefits, primarily relating to sales of Cervarix for the roll-out of Japan's national HPV programme. We have delivered average quarterly underlying sales growth of around 4.5% over the last 7 quarters."
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