Haleon, the consumer health business spun off from GSK last year, raised its annual revenue growth forecast today as consumers continued to buy its brands, such as Sensodyne and Panadol, despite further price hikes.
The group’s organic revenue for the six months to 30 June climbed 10.4%, boosted by a 7.5% increase in price mix. However, in contrast to recent reports from Unilever, Nestlé and Reckitt, Haleon’s volumes continued to grow (+2.9%) as people remained loyal to its essential OTC and oral health products.
“Inflation has been passed on with no real dent to demand,” said Adam Vettese, an analyst at eToro.
In an interview with Reuters, Chief Executive Brian McNamara stated that strong pricing will continue to drive growth in the second half of the year. The company now expects full-year organic revenue growth of between 7% and 8%, compared with an earlier forecast of the top-end of a 4% to 6% range.
In the first-half period, Haleon’s growth was driven by a 22% jump in organic revenue in its Respiratory Health unit as consumers turned to Theraflu and Contac amid rising cases of cold and flu globally. Oral Health sales rose 10.8%, whilst Pain Relief was up 12.9%.
In its Vitamins, Minerals and Supplements (VMS) division, revenue declined 0.5% organically after facing tough comparatives with a surge in demand during the pandemic.
Last month, it was reported that Haleon is planning layoffs in the UK and around the world as part of moves to cut costs and increase productivity. The group’s first-half adjusted operating profit increased 8.9% to £1.27m, but margin was down 40bps to 22.2%.
Commenting on the figures, McNamara 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 share, reiterating the resilience of the brand portfolio.”
Looking ahead, he said: “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.”
