Haleon has cut its annual revenue growth forecast after its first-half performance missed expectations due to a slowdown in demand for its healthcare products in North America.
The British company reported organic revenue growth of 3.2% for the six months to 30 June, slightly below the 3.4% expected by analysts.
Its EMEA & LatAm and APAC regions saw robust growth, up 5.2% and 5.0% respectively. However, sales in North America were down 0.4% as weak consumer confidence in the US and increased competition hurt uptake of its seasonal and discretionary products.
The group’s Oral Health division (+7.6%) was the star performer, driven by new innovations.
Meanwhile, adjusted operating profit rose 9.9% to £1.24bn, primarily helped by price increases and cost cuts.
The company expects stronger organic revenue growth in the second half, led by performance in other regions, but said demand in North America was “likely to remain subdued”.
As a result, Haleon’s organic revenue growth is now expected to be 3.5% for the year ending December. It had previously forecast growth of 4% to 6%.
CEO Brian McNamara highlighted the progress the business has made with its productivity programme to simplify its supply chain and drive gross profit margin. “This contributed to our strong organic operating profit growth while investing in A&P and R&D,” he said. “As a result, we are upgrading our guidance to high-single digit organic operating profit growth for the year.”
Despite the tough conditions in North America, he concluded: “We remain encouraged by the opportunities for growth across the business and confident in delivering our medium-term guidance.”
