Consumer health goods giant Haleon upped its full-year guidance today after posting solid first-half results as demand remained strong for its oral care products and vitamins.
Over the six months to 30 June, the group’s organic revenue growth was 3.5% after a 4.3% increase in prices only resulted in a 0.8% decline in volumes. Reported revenues slipped 0.8% to £5.7m due to the impact of foreign exchange (3.4%) and M&A (0.9%).
Haleon’s so-called ‘Power Brands’ delivered organic growth of 5.6%, with double-digit increases for Sensodyne, Parodontax and Centrum.
The group noted that some 69% of its business portfolio gained or maintained market share in the period. Its Oral Health business saw organic sales growth of 9.9%, while VMS sales grew 9.2%. However, the Pain Relief category suffered a 4.4% decline against tough comparatives, while Respiratory Health slipped 2.3% after also lapping strong cold and flu comparatives.
Meanwhile, organic profit increased 11% with gross margin expansion driven by lower cost inflation and productivity savings, partly offset by brand investment in marketing and R&D. Adjusted operating profit margin rose 160 bps organically to 22.7%.
However, reported operating profit only rose 0.9% to £1.15bn due to restructuring costs, including a productivity programme and closure costs related to a site in Maidenhead.
As a result of the first half performance, Haleon has upped its full-year guidance, with organic operating profit growth now expected to be high-single digit and revenue growth forecast to be between 4-6%.
CEO Brian McNamara commented: “Haleon reported a good first half, with solid organic revenue growth and strong organic operating profit growth, demonstrating that our strategy is delivering. Whilst as expected, comparatives impacted results, revenue growth accelerated in the second quarter with improved volume mix.
“Momentum in Oral Health and Vitamins, Minerals and Supplements was strong, reflecting continued successful innovation combined with excellent execution in market.
“We continue to implement change to become more agile and competitive, with the recent news of the divestment of the NRT business outside of the US as another example of this. Looking ahead, we are well-positioned to deliver on our full-year organic revenue growth guidance and now expect high-single digit organic profit growth. Given the successful delivery of the strategy to date, Haleon is also well placed over the medium term.”
