2 August 2023
2023 Half year results
Six months ended 30 June 2023 (unaudited)
| Strong growth, driven by price with another quarter of positive volume mix | |
| ● | H1 revenue +10.6% to £5,738m, organic growth1 +10.4% with 7.5% price and 2.9% volume/mix |
| ● | Power Brands +10.1% organic growth1; with Sensodyne, parodontax, Panadol, Denture Care and Otrivin standouts |
| ● | 55% of our business gained or maintained market share2 year to date |
| Increased operating profit given positive operational leverage | |
| ● | H1 Adjusted operating profit1 increased 8.9% constant currency to £1,271m |
| ● | H1 Adjusted operating profit margin1 22.2%, down 40bps constant currency |
| ● | H1 Reported operating profit increased 26.8% to £1,141m |
| Strong execution in delivering on deleveraging commitment | |
| ● | H1 net cash flow from operating activities was £749m with Free cash flow of £369m |
| ● | Net debt at 30 June 2023 was £9,525m, representing 3.4x last 12 months net debt/adjusted EBITDA1 |
| ● | Agreed disposal of Lamisil for aggregate consideration of £235m; we expect total cash realised in connection with the disposal to be around £250m4. Completion expected in Q4. |
| ● | Interim dividend declared of 1.8 pence per share |
| Well placed for future growth, updated guidance | |
| ● | FY2023 organic revenue growth1 now expected to be 7-8% |
| ● | FY2023 adjusted operating profit growth of 9-11% constant currency |
| ● | Well placed to deliver on medium term guidance |
Brian McNamara, Chief Executive Officer, Haleon said:
“One year from listing, we are very pleased with Haleon’s first half results. We delivered double digit organic revenue growth, with both price and positive volume mix. Encouragingly this trend was consistent across the first and second quarters. Our growth was also broad based across regions and categories. Performance in the first half also remained competitive with c.55% of our business gaining or maintaining share2, reiterating the resilience of the brand portfolio.
Operating results constant currency were strong, underpinning the increase in full year organic sales growth and adjusted operating profit constant currency guidance shared today. At the same time, we will continue to invest in the business for long term sustainable growth.
Looking ahead, whilst we continue to expect a challenging environment given further pressure on consumer spending and global geopolitical and macroeconomic uncertainties, we remain confident in the resilience of Haleon’s incredible portfolio of category leading brands. Our strategy is delivering, demonstrated with the strength of our results, and we remain confident that Haleon is well positioned for the rest of the year, as well as over the longer term.”
1. Organic revenue growth, Adjusted operating profit, Adjusted operating profit margin, Adjusted diluted earnings per share and Free cash flow are
non-IFRS measures; definitions and calculations of non-IFRS measures can be found on pages 34 to 43
2. Market share statements throughout this report are estimates based on the Group’s analysis of third party market data of revenue for ytd May 2023 including IQVIA, IRI and Nielsen data. Represents % of brand-market combinations gaining or maintaining share (this analysis covers c.90% of Haleon’s total revenue)
3. The commentary in this announcement contain forward-looking statements and should be read in conjunction with the cautionary note on page 34
4. This includes an additional c.£15m expected to be realised from the release of working capital allocated to Lamisil
| Adjusted results2 | Reported results | ||||
| Six months ended 30 June | 2023 | vs 2022 | 2023 | vs 2022 | |
| Organic revenue growth | 10.4% | Revenue | £5,738m | 10.6% | |
| Adjusted operating profit | £1,271m | 8.9%3 | Operating profit | £1,141m | 26.8% |
| Adjusted operating profit margin | 22.2% | (40)bps3 | Operating profit margin | 19.9% | 260 bps |
| Adjusted diluted earnings per share | 8.5p | (8.3)%3 | Diluted earnings per share | 7.4p | 32.1% |
| Free cash flow | £369m | £(184)m | Net cash flow from operating activities | £749m | £69m |
1. The commentary in this announcement contain forward-looking statements and should be read in conjunction with the cautionary note on page 34.
2. Organic revenue growth, Adjusted operating profit, Adjusted operating profit margin, Adjusted diluted earnings per share and Free cash flow are
non-IFRS measures; definitions and calculations of non-IFRS measures can be found on pages 34 to 43.
3. Change at constant currency.
Outlook
| For FY 2023 the Company now expects: ●Organic revenue growth to be 7-8%. This compares with “towards the upper end of the 4-6% range” as shared in the Q1 Trading Statement on 3 May 2023. ●Adjusted operating profit growth to be 9-11% constant currency ●Net interest expense of c.£350m ●Adjusted effective tax rate of 23-24% |
Dividend
Consistent with our previous guidance, the Board has declared a H1 2023 interim dividend of 1.8 pence per ordinary share.
This interim dividend is expected to be paid on 5 October 2023 to holders of ordinary shares and US American Depositary Shares (ADS) on the register as of 25 August 2023 (the record date). The ex-dividend date is expected to be 24 August 2023. For ordinary shareholders wishing to participate in the Dividend Reinvestment Programme (DRIP), the election deadline for the DRIP is 14 September 2023.
Foreign exchange
Whilst we do not guide specifically on foreign exchange, translational foreign exchange based on spot rates as at 30 June 2023 and using FY2022 results as a base, would have a negative impact of c.4% on revenue and negative impact of c.6.5% on Adjusted operating profit.