Haleon reports 'solid organic revenue'

Consumer health goods giant Haleon on Thursday (1) upped its full-year guidance after posting solid first-half results as demand remained strong for its oral care products and vitamins.

Over the six months to June 30, the group’s organic revenue growth was 3.5 per cent after a 4.3 per cent increase in prices only resulted in a 0.8 per cent decline in volumes. Reported revenues slipped 0.8 per cent to £5.7 million due to the impact of foreign exchange (3.4 per cent) and M&A (0.9 per cent).

Haleon’s so-called "Power Brands" delivered organic growth of 5.6 per cent, with double-digit increases for Sensodyne, Parodontax and Centrum.

The group noted that some 69 per cent of its business portfolio gained or maintained market share in the period. Its Oral Health business saw organic sales growth of 9.9 per cent, while VMS sales grew 9.2 per cent . However, the Pain Relief category suffered a 4.4 per cent decline against tough comparatives, while Respiratory Health slipped 2.3 per cent after also lapping strong cold and flu comparatives.

Meanwhile, organic profit increased 11 per cent with gross margin expansion driven by lower cost inflation and productivity savings, partly offset by brand investment in marketing and R&D. Adjusted operating profit margin rose 160 bps organically to 22.7 per cent.

However, reported operating profit only rose 0.9 per cent to £1.15bn due to restructuring costs, including a productivity programme and closure costs related to a site in Maidenhead.

As a result of the first half performance, Haleon has upped its full-year guidance, with organic operating profit growth now expected to be high-single digit and revenue growth forecast to be between 4-6 per cent.

CEO Brian McNamara commented, “Haleon reported a good first half, with solid organic revenue growth and strong organic operating profit growth, demonstrating that our strategy is delivering. Whilst as expected, comparatives impacted results, revenue growth accelerated in the second quarter with improved volume mix.

“Momentum in Oral Health and Vitamins, Minerals and Supplements was strong, reflecting continued successful innovation combined with excellent execution in market.

“We continue to implement change to become more agile and competitive, with the recent news of the divestment of the NRT business outside of the US as another example of this. Looking ahead, we are well-positioned to deliver on our full-year organic revenue growth guidance and now expect high-single digit organic profit growth. Given the successful delivery of the strategy to date, Haleon is also well placed over the medium term.”