Cash expectations for the year have improved, but we still anticipate that 2023 cash generated from operations will be slightly lower than 2022 due to the one-off we’ve seen from Gilead last year. We confirm our commitment of more than £10 billion of cash generated from ops by 2026. Net debt stands at £17.6 billion with free cash inflow and proceeds from the Haleon stake are partly deployed through business development on the acquisition of BELLUS healthcare. Turning to the guidance on Slide 26. Given our sustained strong performance across all segments in the business, we are upgrading our guidance at CER for the full year. And as a reminder, our guidance excludes the impact of COVID-19. We now expect sales to increase 12% to 13%. We expect adjusted operating profit to increase between 13% and 15%, and adjusted earnings per share to increase 17% to 20%.
The strength of the Arexvy launch has been ahead of our initial expectations and is the main source of the guidance upgrade. Q3 sales of Arexvy benefited from strong demand and initial channel inventory build, with TRx volumes representing around one-third of the volumes sold. As Luke referenced, we are projecting our forecast for the season in line with the high-dose flu analogues, and therefore expect full year sales of around £0.9 billion to £1 billion. There is however, still much to learn given the novel nature of this new vaccine, including annual vaccination patterns, duration of protection, competitor dynamics and what expert recommendations might be, and we anticipate further insight following the end of the US flu season, which will inform our outlook for 2024.
We look forward to updating you further as part of our full year results and remain confident in our longer-term revenue ambition for Arexvy. Turning to the dynamics within upgraded guidance. Within sales, we’re increasing our expectations across all product groups. We now anticipate Vaccine growth of around 20%. Specialty Medicines to grow low double-digits. And within this, HIV to grow around 10%. And General Medicines to grow low- to mid-single digits. Moving down the P&L to operating profit, we now expect royalties to be around £900 million with no change to our expectations for the other lines of the P&L. To EPS, we expect lower interest expense of between £650 million and £700 million. In terms of currency, if exchange rates were to hold at the closing rates on the 30th of September for the rest of the year, the estimated adverse impact on sterling turnover growth for the full year would be minus 2% and on adjusted operating profit growth, it would be minus 4%.
Finally, we remind you of a few modeling assumptions in 2024, namely the impact of AMP cap, the loss of Gardasil royalties and the tax rate likely being a couple of percentage points higher due to OECD legislation. More details on these are included in our pre-quarterly aide memoire, and I look forward to guiding more fully at the end of the year. And thank you, and with that, I will hand back to Emma.
Emma Walmsley: Thanks, Julie. Turning lastly to Slide 27. So, in summary, we are seeing strong and sustained improvements in our performance. This quarter marks the seventh consecutive quarter of competitive sales and profit growth, which supports an upgrade to our guidance for the year. We also remain very focused on strengthening our pipeline and our longer-term outlooks with progress in vaccines, developments of our long-acting HIV portfolio and new prospects in respiratory, all pointing to new growth opportunities for GSK. We have strong performance as we enter 2024, and we look forward to keeping you updated on our progress. Thank you for listening. And let’s now please all move to the Q&A.
A – Nick Stone: Thanks. [Operator Instructions] With that, I’d like to take our first question from Graham Parry. Graham, over to you.
Graham Parry: Great. Thanks, Nick. Thanks for taking my question. So, I’d start with Arexvy. So, it’s question on the level of discounting in the initial launch. So, two-thirds of your £709 million was inventory and you’ve administered some, I think, 1.4 million, 1.5 million doses. That means underlying sales are in the sort of £230 million to £240 million range, and that would imply net price probably more than 30% below the list price. So, can I just check that’s the right sort of ballpark? And is that mostly wholesaler discounting or retail pharmacy discounting to drive the initial inventory build and something which we might see sort of ameliorates little bit over time, or is that just kind of where the competitive nature of the market is at the moment?
And then secondly, I know, Julie you touched on this, but dynamics into next year, just be interested [Technical Difficulty] you obviously won’t have the initial inventory build, but how much of that inventory do you think is just sort of [Technical Difficulty] you don’t have the return of the patient — people you vaccinated this year. So, any thoughts you have so far on how far penetrated you are into the easy wins of the more elderly comorbid et cetera, and how much tougher it might be to get return or to new people to get vaccinated next year? Thank you.
Emma Walmsley: Thanks, Graham. Well, we’ll come to Julie in a minute on guidance and thoughts around next year, although obviously, we will mainly be giving you thoughts around next year when we come to February 2024. And I would just remind everybody that whilst we are absolutely delighted with the fast and competitive start here on RSV, it is just the start, it’s the first season, and we remain very ambitious to the £3 billion, at least that we expect this asset to represent. But let’s go to Luke first, noting, Graham, you will fully understand we’re not going to be declaring all our commercial details on this call. But Luke, do you want to comment more broadly?
Luke Miels: Yeah, Graham, thank you. I mean, I think we’ve been quite disciplined taking a longer-term around pricing and contracting and it’s landed quite well. I won’t give you any more color than that in terms of the percentages at this point because I’m sure our friends in New York have probably got up a little bit early this morning. But what I would say is to build on Emma’s point, I think in the short-term, things are uncertain. We’re very happy with the launch. In the long-term, we’re very certain. I think so far, if we look at some of the metrics which I can try and help you with, it’s about 50% co-administration with flu. This is a very large overlap with that population. And interestingly, around 15% of people are getting free shots when they come into the pharmacy.
85% is that 65 to 84 age population. So again, very similar to high-dose flu. And I think for the rest of the year, in terms of demand, you’re still seeing good market research in terms of HCPs recommending it, so it’s about 64% based on our latest market research, which is encouraging. And of course, the CDC is advising doctors to keep going. So that’s on a positive side of the ledger. But the fact is this — our working hypothesis that this is more of a flu-like trajectory. And as people start coming into pharmacies and we see a reduction in staffing levels of pharmacy who actually deliver these vaccines, then we’re going to see a drop-off in demand. And that’s our hypothesis at this point. We’ll obviously have a lot more color in Q4 to give you an update.
And then as Emma said, I think we’re very, very confident in terms of the £3 billion number that we have outlined in the past.
