First-quarter results from GSK yesterday showed its Consumer Healthcare division is continuing to make good progress as it prepares to split from the main group in a couple of months’ time.
The unit’s turnover during the three months to 31 March grew 14% to £2.63bn, with strong growth across all categories.
Sales benefited from favourable prior year comparators, especially in Respiratory health, which saw a strong rebound (+51%) following the historically low cold and flu season in the same quarter last year when Covid restrictions meant less transmission of other viruses.
In addition, GSK noted advanced retailer and wholesaler stock-in, and initial distributor sell-in due to the systems cutover and distribution business model change ahead of the demerger contributed approximately two percentage points to total growth.
Strong sales growth in Pain relief (+17%) benefited from increased demand during the Omicron wave, whilst a consumer focus on immunity lifted sales in vitamins, minerals and supplements by 17%. Oral health was the slowest growing category, up 6%.
GSK is on track to spin off and list its Consumer Healthcare business in July, leaving it to concentrate on its main pharmaceutical business.
The demerged company will be called Haleon, with GSK recently outlining its strategy and outlook for the business at a Capital Markets Day for investors and analysts. The new company will focus “100% on consumer health” with expected annual organic sales growth of 4-6% in the medium term, from almost £10bn a year currently.
The spin-off plan follows GSK’s recent rejection of a £50bn offer for the Consumer Health unit from Unilever, arguing that it undervalued the business.
Emma Walmsley, GSK’s Chief Executive, said yesterday: “We continue to see very good momentum in Consumer Healthcare, demonstrating strong potential of this business ahead of its proposed demerger in July, to become Haleon.”
