GlaxoSmithKline sales contract by 1.0 per cent in 2012

FTSE-100 listed pharmaceutical giant GlaxoSmithKline (GSK) has posted a 1.0 per cent decline in its annual turnover for the year ending December 31st, according to a financial update issued by the company on Wednesday.

Turnover contracted to £26,431m with the adverse impact to performance in 2012 being blamed on weaker than expected sales from GSK's European business.

European sales lower than expectedGroup turnover by geographic region contracted 7.0% to £7,320m at constant exchange rates, while sales slid 4.0% to £8,446m in the US.

In Japan, GSK's sales also dropped by 5.0% to £2,225m. These reductions in sales were partially offset by growth in the Emerging Markets region.

Emerging markets potentialGSK reported that total sales in emerging markets currently account for 26% of its business and the group reported sales there had risen by 10% over the year.

The group delivered core earnings per share of 112.7p in 2012 and cash inflow from operating activities of £7.0bn before legal settlements.

Pharmaceuticals turnover fell 2.0%, which GSK said reflected increased pressure from austerity measures in Europe.

Vaccines turnover declined 2.0%, reflecting the impact of lower sales of Cervarix in Japan - £132m worth of Cervarix was sold in 2012, compared to £344m in 2011 following the completion of the 2011 HPV vaccination catch-up programme.

R&D: 15 products potentilly launchable in coming three yearsGSK reported that "significant progress" had been made in its research and development department, stating that the group had six new products under regulatory review. It said that over the next 15 years, GSK would have the potential to launch around 15 new products globally.

Analysts' predictions: Turnover beats expectationsOverall, GSK's results exceeded the expectations of analysts at Credit Suisse.

Analysts at Credit Suisse forecast in January that GlaxoSmithKline would report £26,358m in group sales - slightly less than the £26,431m which was reported on Wednesday.

The financial services company had also forecast a core earnings per share value not diluted at 111.7p. GSK's results showed a core earnings per share of 112.7p.

GSK's share price was down 0.21% to 1,439.50p at 13:08 on Wednesday afternoon.

MF