Company Reports

Haleon delivered 4.5% revenue growth (1.7% from price and 1.4% from volume/mix) and 12% adjusted earnings per share growth in the second quarter. Shares were down 3% intraday on July 30.

Haleon is one of the largest consumer healthcare companies in the world. Over the last few years, Haleon has achieved a more rationalized operation by divesting multiple nonstrategic brands, slimming down its manufacturing footprint, and dialing back the number of warehouses and distribution centers. We appreciate the firm's efforts to optimize its business and believe it is well established to enjoy long-term industry trends, including an aging population, premiumization of consumer healthcare products, and growing emerging markets, that should fuel its top line.

Haleon delivered GBP 2.9 billion in sales during the first quarter, flat versus last year and in line with FactSet consensus. Price had 240 basis points of tailwinds and volume/mix faced 20 basis points of headwinds. Shares are down 2% on results.

Haleon delivered 2.1% organic revenue growth (2.4% from price and negative 0.3% from volume/mix) during the fourth quarter. Full-year revenue of GBP 11 billion was up 3% organic, 50 basis points below guidance and 200 basis points weaker than last year. Shares are down 6%.

Haleon is one of the largest consumer healthcare companies in the world. Over the last few years, Haleon has achieved a more rationalized operation by divesting multiple non-strategic brands, slimming down its manufacturing footprint, and dialing back the number of warehouses and distribution centers. We appreciate the firm's efforts to optimize its business and believe it is well established to enjoy long-term industry trends, including an aging population, premiumization of consumer healthcare products, and growing emerging markets, that should fuel its top line.

Haleon delivered 0.7% revenue growth (3.4% organic) during the third quarter. Results were in line with consensus estimates, and shares are trading sideways after the release.

Haleon is one of the largest consumer healthcare companies in the world. Over the last few years, Haleon has achieved a more rationalized operation by divesting multiple non-strategic brands, slimming down its manufacturing footprint, and dialing back the number of warehouses and distribution centers. We appreciate the company’s efforts to optimize its business and believe it is well established to enjoy long-term industry trends, including an aging population, premiumization of consumer healthcare products, and growing emerging markets, that should fuel its top line.

During the first six months, Haleon reported 3.2% and 9.9% year-over-year organic growth for revenue and operating profit, respectively.

Wide-moat Haleon reported first-quarter earnings that were largely as we expected. Total sales of GBP 2.9 billion were down 2.3% year over year, but up 3.5% organically (at constant currencies) with 2.4% from price and 1.1% from volume/mix. All five product categories delivered positive organic growth with notable performance from oral health, up 6.6%, and pain relief, up 2.6%. Strong mid-single-digit growth extended across brands like Sensodyne (strong commercial execution and Clinical platform rollout) and Advil and Voltaren (solid demand).

Haleon is one of the largest consumer healthcare companies in the world. Over the last few years, Haleon has achieved a more rationalized operation by divesting multiple non-strategic brands, slimming down its manufacturing footprint, and dialing back the number of warehouses and distribution centers. We appreciate the company’s efforts to optimize its business and believe it is well established to enjoy long-term industry trends, including an aging population, premiumization of consumer healthcare products, and growing emerging markets, that should fuel its top line.

Wide-moat Haleon reported solid fourth-quarter earnings that came largely in line with our expectations. Total sales of GBP 2.8 billion was down 0.3% but was up 6.8% organically with 2.7% from price and 4.1% from volume/mix. Strong performance was mostly seen across the portfolio, with notable gains from oral health (up 10.6% organic) and VMS (up 8.2% organic), but respiratory (down 1.3% organic) was challenged from weak cold and flu season. This had a particularly strong impact on North America but the region still delivered a 2.4% organic growth (0.5% on price and 1.9% on volume/mix). Two other regions both delivered high-single-digit organic growth and we attribute this to momentum in key products like Sensodyne, which was recently bolstered by the rollout of Clinical White lineup, Centrum, which continues to be expanded to new markets, and Panadol, which is seeing nice traction thanks to the introduction of Dual Action lineup. We made minor changes to our near-term assumptions but maintain our $9.50, or GBX 372, fair value estimates.

Haleon is one of the largest consumer healthcare companies in the world. Over the last few years, Haleon has achieved a more rationalized operation by divesting multiple non-strategic brands, slimming down its manufacturing footprint, and dialing back the number of warehouses and distribution centers. We appreciate the company’s efforts to optimize its business and believe it is well established to enjoy long-term industry trends, including an aging population, premiumization of consumer healthcare products, and growing emerging markets, that should fuel its top line.

Wide-moat Haleon reported third-quarter earnings that came in a tad below our expectations. Total sales of GBP 2.8 billion were down 0.6% year over year, as solid organic growth across the portfolio was offset by unfavorable foreign exchange as well as effects from the ChapStick and Lamisil divestitures. Excluding these headwinds, the firm saw 3.3% and 2.8% gains from price and volume/mix, respectively. Pricing continues to come down, which is expected as inflationary pressures ease across many regions, but volume is improving. After adjusting our model and accounting for the time value of money, we maintain our fair value estimate of $9.50 (GBX 372) per share.

Wide-moat Haleon reported solid second-quarter earnings and delivered better-than-anticipated results. Total sales of GBP 2.8 billion were up slightly, 0.8% year over year, and we had expected a slight decline in the top line. Despite pain relief and respiratory health segments facing volume challenges from lapping last year's unusually high volume thanks to inventory stocking in China, the other three product groups enjoyed nice organic growth. This was thanks to core brands like Sensodyne and Centrum touting their brand intangibles and winning shares. At the firm-wide level, price gain of 3.4% and volume/mix of 0.7% puts Haleon at the top among other consumer packaged goods players. We think new product launches, including Sensodyne Clinical White and continued investment behind advertising and promotion through partnerships with healthcare professionals are paying off. These helped the firm combat pressures from difficult macro environment and price-wary consumers. After mildly ticking up our near-term assumptions, accounting for time value of money impacts, and a slightly more favorable foreign exchange rate, we raise our fair value estimate to $9.50 (GBX 372) per share from $8.80 (GBX 352).

Haleon is one of the largest consumer healthcare companies in the world. Over the last few years, Haleon has achieved a more rationalized operation by divesting multiple non-strategic brands, slimming down its manufacturing footprint, and dialing back the number of warehouses and distribution centers. We appreciate the company’s efforts to optimize its business and believe it is well established to enjoy long-term industry trends, including an aging population, premiumization of consumer healthcare products, and growing emerging markets, that should fuel its top line.

Wide-moat Haleon announced on June 26 that it entered into an agreement to divest its smoking cessation business outside the US to no-moat Dr. Reddy’s for GBP 500 million (GBP 458 million upfront plus performance-based payments of up to GBP 42 million). The portfolio includes brands like Nicotinell, Nicabate, and Habitrol. The deal is expected to close during the last quarter of 2024 at the earliest. We do not expect material changes to our model from this deal and maintain our fair value estimate of $8.80, or GBX 352, per share for Haleon and $60 per share for Dr. Reddy’s.

Wide-moat Haleon reported first-quarter earnings that came in largely as we expected. Total sales of GBP 2.9 billion were down 2.2% year over year, with price and volume/mix contributing 5% and negative 2%, respectively. Unfavorable foreign exchange, which we estimate pulled back growth by a midsingle digit, proved to be a significant headwind but solid demand among key brands helped deliver decent results. After adjusting our near-term assumptions and accounting for time value of money impacts, we slightly tick up our fair value estimate to $8.80 per share from $8.70.

Haleon is one of the largest consumer healthcare companies in the world. Over the last few years, Haleon has achieved a more rationalized operation by divesting multiple non-strategic brands, slimming down its manufacturing footprint, and dialing back the number of warehouses and distribution centers. We appreciate the company’s efforts to optimize its business and believe it is well established to enjoy long-term industry trends, including an aging population, premiumization of consumer healthcare products, and growing emerging markets, that should fuel its top line.

Wide-moat Haleon reported on April 24 that its chief financial officer, Tobias Hestler, will be stepping down due to long-term health conditions and will be replaced by Dawn Allen. Allen is currently serving as the CFO of Tate & Lyle, a food and beverage products supplier, and has previously worked at Mars for over 20 years tackling various roles, including vice president and global CFO, global transformation at Mars Inc. Allen will join Haleon on Oct. 28, 2024, and we think she brings in decades of knowledge and relevant experience in the consumer industry to help the management team steer the company in the right direction.

Haleon is one of the largest consumer healthcare companies in the world. Over the last few years, Haleon has achieved a more rationalized operation by divesting multiple non-strategic brands, slimming down its manufacturing footprint, and dialing back the number of warehouses and distribution centers. We appreciate the company’s efforts to optimize its business and believe it is well established to enjoy long-term industry trends, including an aging population, premiumization of consumer healthcare products, and growing emerging markets, that should fuel its top line.