Haleon delivers a strong quarter of growth

Haleon plc (LON:HLN) has announced its 2022 Q3 trading statement¹ for the three months ended 30 September 2022.

Another quarter of strong growth underpinned by positive volume/mix

·      Q3 Reported revenue +16.1%; organic +8.1% with 5.5% price, 2.6% volume/mix

·      9m Reported revenue +14.4%; organic +10.3% with 4.0% price, 6.3% volume/mix

·      E-commerce 9% of total revenue with continued growth in the high teens

·      Healthy power brand Q3 organic revenue growth +7.4%; 9m +11.3%

Pricing and efficiencies offsetting inflationary pressures

·      Q3 Reported operating profit +12.2% to £569m; margin 19.7% down 70bps

·      Q3 Adjusted operating profit² increased 14.9% to £725m

o Margin 25.1% down 20bps on a reported basis; down 90bps constant currency

o Pricing and increased efficiencies fully offset inflationary pressures

o Decline due to guided standalone costs and adverse transactional FX

Increased financial flexibility despite adverse currency

·      Net debt £10,784m; further £250m of £1.5bn term loan recently repaid

Upgrade to full year guidance

·      FY22 organic revenue growth now expected at 8.0-8.5%

·      FY Adjusted operating profit margin² expected to be slightly above last year at actual exchange rates (FY21: 22.8%), given recent favourable translational FX movements³

Brian McNamara, Chief Executive Officer, Haleon said:

“Haleon delivered another strong quarter of growth in Q3 with 8% organic revenue growth and double digit growth for the nine months, with increased pricing through the year and continued positive volume/mix. We saw accelerated growth in the third quarter in Oral Health, whilst strong comparatives in Vitamins, Minerals and Supplements resulted in category revenue down slightly overall sales were similar to earlier quarters. Respiratory performance was strong given sustained incidences of Covid and cold and flu combined with successful innovation. Looking ahead given this positive momentum, we now expect FY organic revenue to be between 8.0-8.5% and have updated margin expectations for more favourable currency.

Overall Haleon is demonstrating its strength in a challenging market environment. Whilst macroeconomic conditions remain volatile and uncertain, we remain confident that the quality of our portfolio, disciplined execution of our strategy, and continued investment will enable Haleon to deliver on medium term guidance.”

1. All numbers within the release are unaudited and are organic unless referenced otherwise. The commentary in this announcement contains forward looking statements and should be read in conjunction with the cautionary note on page 8

2. Organic revenue growth, Adjusted operating profit, Adjusted operating profit margin are non-IFRS measures; definitions and calculations of non-IFRS measures can be found on pages 8-12

3. Assuming spot rates as at 31 October 2022 are sustained

Outlook

FY22 organic revenue growth now expected at 8.0-8.5%.

At H1 Results we guided to FY22 adjusted operating profit margin slightly down at constant currency. Operational performance remains as expected with pricing and increased efficiencies fully offsetting inflationary pressures, albeit we now would expect an increase in the adverse transactional FX impact from recent currency movements of up to 30bps.  

Adjusted operating margin in FY22 is now expected to be slightly above last year at actual exchange rates (FY21: 22.8%), given recent favourable translational FX movements³.

Presentation for analysts and shareholders:

A short presentation followed by Q&A will be hosted by Tobias Hestler, Chief Financial Officer and Sonya Ghobrial, Head of Investor Relations at 9am GMT (10am CET) on 10 November 2022, which can be accessed at www.haleon.com/investors.

For analysts and shareholders wishing to ask questions on the Q&A call, please use the dial-in details below which will have a Q&A facility:

An archived webcast of the Q&A call will be available later on the day of the results and can be accessed at www.haleon.com/en/investors/   

Financial reporting calendar