Haleon plc: 2023 AGM Trading Update
Business context and reporting period
Haleon plc, a global consumer-health company, filed a Form 6-K on April 20, 2023, attaching its AGM trading update. The update covers the three months ended March 31, 2023, and reports performance across Oral Health, Vitamins, Minerals and Supplements (VMS), Pain Relief, Respiratory Health, and Digestive Health and Other.
Key financial and operating metrics
| Metric | Q1 2023 | Q1 2022 | Change |
|---|---|---|---|
| Group revenue | £2,986m | £2,627m | 13.7% reported; 9.9% organic |
| Price contribution | 7.1% organic growth contribution | ||
| Volume/mix contribution | 2.8% organic growth contribution | ||
| Oral Health revenue | £811m | £741m | 9.4% reported; 6.6% organic |
| VMS revenue | £405m | £405m | 0.0% reported; (3.7)% organic |
| Pain Relief revenue | £724m | £635m | 14.0% reported; 11.0% organic |
| Respiratory Health revenue | £510m | £367m | 39.0% reported; 33.0% organic |
| Digestive Health and Other revenue | £536m | £479m | 11.9% reported; 7.3% organic |
Geographically, reported revenue increased 14.0% in North America, 13.3% in EMEA and LatAm, and 13.7% in Asia Pacific. Organic growth was 5.1%, 13.1%, and 11.7%, respectively.
The filing does not provide Q1 profit, margins, operating cash flow, free cash flow, debt, or liquidity figures.
Material changes versus the prior comparable period
- Growth was broad-based across the portfolio, with particularly strong Respiratory Health performance driven by a continued cold and flu season, restocking, and low prior-year inventory levels in some markets.
- VMS declined organically, primarily because of a strong Q1 2022 comparison for Emergen-C in the United States during the Omicron wave. Centrum grew at a high-single-digit rate.
- Asia Pacific benefited from strength in China after lockdowns ended, particularly in Pain Relief, alongside elevated COVID-19 and cold and flu incidence.
- Q1 2022 revenue benefited by approximately £50m from an ERP system cutover and distribution-business-model change, creating a difficult comparison for Q1 2023.
Guidance, outlook, risks, and unusual items
- Following the strong start to the year, management expects fiscal-year 2023 organic revenue growth toward the upper end of its 4% to 6% guidance range.
- All other fiscal-year 2023 guidance remained unchanged. The filing does not state the other guidance metrics.
- The company planned to provide a fuller first-quarter trading update on May 3, 2023.
- Forward-looking statements are subject to risks and uncertainties, including those described in the risk factors on pages 202–210 of Haleon’s 2022 Annual Report and Form 20-F.
- The company cautions that actual results may differ materially from forward-looking statements and states that the update is not a profit forecast or estimate.
Important facts for investors to verify
- Confirm the subsequent May 3, 2023 trading statement and whether the upper-end growth expectation was maintained or changed.
- Assess the sustainability of Respiratory Health growth after favorable seasonal and restocking effects.
- Monitor VMS performance, particularly the impact of the Emergen-C comparison in North America.
- Review the 2022 Annual Report and Form 20-F for the complete risk factors and definitions of non-IFRS measures.
- Obtain separate disclosures for profitability, margins, cash flow, debt, liquidity, and any reconciliation of organic revenue growth to IFRS measures.