Haleon delivers strong growth in H1 with revenue increasing 13.4%

Haleon plc (LON:HLN) has provided a trading update for the six months ended 30 June 2022 and will report its full half-year results on 19 September 2022. GSK plc is releasing its half-year results for the six months ended 30 June 2022 today. An explanation of the disclosures made by GSK is included in the Appendix I to this trading update.

Key highlights:

·   Successful listing on LSE as a member of the FTSE 100, and NYSE following demerger from GSK 

·  H1 revenue increased +13.4% to £5,188m, organic revenue growth +11.6%; 3.7% price and 7.9% volume mix

·  Q2 revenue increased +12.9%, organic revenue growth +7.5%; 4.0% price and 3.5% volume mix, after an adverse impact of 2% on volume due to reversal of Q1 system cutover benefit   

·  Strong power brand performance in H1: +13.4% organic growth with Panadol, Theraflu, Otrivin, Advil and Centrum particularly strong

·   Rebound and strength in Cold and Flu season added 4% to H1 organic growth

·   Ecommerce 9% total sales, growth in the high teens

·   FY22 organic revenue growth is now expected to be 6-8%

·  FY22 adjusted operating margin slightly down at constant currency on LY (FY 2021: 22.8%). Strong growth, Pfizer synergies, pricing and ongoing supply efficiencies, will largely offset standalone costs, continued investment, inflationary cost pressure and the impact of Russia and Ukraine. Assuming current spot rates, currency will be slightly positive on adjusted operating margin.

Brian McNamara Chief Executive Officer said:

“Haleon delivered strong growth in the first half continuing the positive momentum seen since the start of year. This reflects the strength of our portfolio, continued innovation and excellent commercial execution across our markets. Organic revenue growth of 11.6% was broad based across all categories and geographic segments, and importantly reflected a healthy balance of price and volume mix. Respiratory benefited from a strong cold and flu season, and Pain Relief and Vitamins, Minerals and Supplements delivered double digit growth. Oral Health grew mid single digit. With two strong quarters delivered and continued momentum into the second half, we now expect to deliver full year organic revenue growth ahead of our medium term guidance range. We continue to invest to drive sustainable growth and remain confident in delivering on our medium term guidance.”

1. Reconciliation of IFRS results to adjusted results can be found on pages 9 to 10.

Outlook

Following strong momentum in the first half, FY2022 organic revenue growth is now expected to be 6-8%.  

Adjusted operating margin in FY2022 is expected to be slightly down at constant currency on last year (FY21: 22.8%). Strong growth, the Pfizer synergies, pricing and ongoing supply efficiencies, will largely offset Haleon standalone costs (£175-£200 million), continued investment, inflationary cost pressure and the impact of Russia and Ukraine. Assuming current spot rates are sustained for the rest of the year, currency will be slightly positive on adjusted operating margin.

All medium term guidance reiterated, with annual organic revenue growth of 4-6%, sustainable moderate adjusted operating margin expansion at constant currency, and Net debt/EBITDA below 3x by the end of 2024. 

Financial Reporting Disclosure and calendar

Haleon quarterly revenue split for Q3 and Q4 in 2021 and HY21 results provided in appendix