Haleon Plc · LSE:HLN
Haleon — Debt Investor Presentation (March 2023)
33 slides from Haleon's debt investor presentation, March 2023
Slide 1: 2022 Full year results
2022 Full year results March 2023
Slide 2: Disclaimer
Disclaimer The information contained in this document has been prepared solely for informational purposes and is not All opinions and estimates in this document are subject to change without notice. Subject to Haleon's an offer to buy or sell or a solicitation of an offer to buy or sell any security
Slide 3: Tobias Hestler, CFO - 2022 Full year results
Tobias Hestler CFO 2022 Full year results
Slide 4: Extraordinary year, successfully separated and unveiled Haleon
Extraordinary year, successfully separated and unveiled Haleon, a listed 100% consumer heath company Our strategy is working, delivering strong growth with opportunities across the business for this to continue FY22 saw strong top line growth with 6%1 adjusted operating profit growth despite signifi
Slide 5: Clear approach delivering our growth ambitions
Clear approach delivering our growth ambitions World class Competitive Strategy to Growth portfolio capabilities outperform ambitions Category-leading Human understanding + Household penetration 4-6% organic annual brands trusted science revenue growth 1 New and emerging Attractive Proven brand-buil
Slide 6: Full year results and Q4 results
Full year results 9.0% 4.3%/4.7% 10.1% Organic sales growth1 Price / volume mix Power brand growth Q4 results Adjusted operating margin1: 22.8% flat on reported and down 60bps CER 5.0% 5.0%/0% Organic sales growth1 Price / volume mix Competitive performance: 2/3 business gained or held share2 Ecomme
Slide 7: World class portfolio of category leading brands
World class portfolio of category leading brands Oral Health VMS Pain Relief Respiratory Health Digestive Health and other £3.0bn revenue 20221 £1.7bn revenue 20221 £2.6bn revenue 20221 £1.6bn revenue 20221 £2.1bn revenue 20221 Market position2 #33 #15 # 15 # 15 # 15 Digestive Health #1 Therapeutic
Slide 8: Performance underpinned by strong execution and financial discipline
Performance underpinned by strong execution and financial discipline Demerger, listing Offsetting and separation inflationary pressures Synergies Successful separation Through operating leverage and Technology systems Delivered final Pfizer driving efficiency across the cutover complete synergies ta
Slide 9: Responsible business integral to our strategy
Responsible business integral to our strategy Environmental Health Strong commitment inclusivity Governance Continuing to progress Seeing AI Corporate governance, against environmental Partnership with policies and standard in targets set out at our Microsoft to help place Capital Markets Day in con
Slide 10: Delivering strong results
2022 Delivering strong results £10.9bn £2.5bn 22.8% £1.6bn Revenue Adjusted Adjusted Free cash flow1 operating profit 1 operating profit margin1 9.0% +5.9% Flat 3.6x AER & Organic revenue growth1 CER growth1 (60)bps Net debt / Adjusted EBITDA1 CER 1 Reconciliation of IFRS to Adjusted results can be
Slide 11: Strong FY revenue growth
Strong FY revenue growth Healthy balance of volume / mix and pricing £m +9.0% Organic revenue growth 5.0% 4.3% (0.2%) 4.7% Acquisitions, Foreign 10,858 Price disposals and exchange Volume/mix 9,545 MSA1 +13.8% Reported FY 2021 FY 2022 sales sales 1 Includes 0.3% from acquisitions, (0.2)% from Dispos
Slide 12: Broad based growth across categories
Broad based growth across categories Healthy balance of price and volume / mix FY22 Revenue Organic revenue growth1 £m FY Q1 Q2 Q3 Q4 Oral Health 2,957 5.6% 7.9% 2.0% 6.7% 5.3% VMS 1,675 5.0% 14.9% 9.0% (1.4)% (0.7)% Q4 Decline driven by comparative Pain Relief 2,551 8.9% 18.9% 4.9% 3.6% 8.9% Strong
Slide 13: Respiratory
Respiratory Q4 cold and flu incidences ahead of 2019 and 2021 levels Weekly US market cold and flu sales ($m) Winter season Off season Winter season 2021/22 peak was in late Prolonged strong consumption 2022/23 strong early peak in December/January in ‘off-season’ November/December 400 2022 350 300
Slide 14: VMS – Underlying consumption remains strong
VMS – Underlying consumption remains strong Recent modest growth 72% declines are driven by lapping strong demand in 2021 from both Delta and Omicron variants Haleon plays in a sub-set of VMS growing Consumers have remained post Covid ahead of the overall VMS market Composition of global VMS market
Slide 15: Strong revenue growth across regions
Strong revenue growth across regions Revenue North North America America Asia Pacific 5.9% OSG 1 £4,116m (2021: £3,525m) EMEA & LATAM EMEA & LATAM 10.9% OSG 1 £4,270m (2021: £3,877m) Asia Pacific Developed markets1 Emerging markets1 10.6% OSG 1 £2,472m (2021: £2,143m) 5.7% 16.3% 1 Refers to Organic
Slide 16: North America
North America Healthy balance of price and volume / mix 5.9 2.9 3.0 1 % % % • FY organic growth : 5.9% with 2.9% price and 3.0% volume/mix Organic growth1 Price Volume / mix • Q4 organic growth : 1 1.6% with 3.0% price and (1.4)% volume/mix £4,116m 26.0% • Decline in Q4 volume/mix reflects: – Tough
Slide 17: EMEA & LATAM
EMEA & LATAM Strong organic growth helped by pricing 10.9 6.4 4.5 1 % % % • FY organic growth : 10.9% with 6.4% price and 4.5% volume/mix Organic growth1 Price Volume / mix • Q4 organic growth : 1 6.8% with 8.8% price and (2.0)% volume/mix £4,270m 22.9% • Decline in Q4 volume/mix reflects: – Lower v
Slide 18: Asia Pacific
Asia Pacific Organic growth driven by strong volume growth 10.6 2.6 8.0 1 % % % • FY organic growth : 10.6% with 2.6% price and 8.0% volume/mix Organic growth1 Price Volume / mix • Q4 organic growth : 1 8.3% with 1.5% price and 6.8% volume/mix £2,472 m 20.5 % 1 • Q4 organic growth reflects: – Lower
Slide 19: Adjusted operating profit growth of 6% constant currency
Adjusted operating profit growth of 6% constant currency £m FY 2022 FY 2021 % change Revenue 10,858 9,545 13.8 Power brand organic revenue growth ahead of Haleon organic growth (10.1%) Adjusted gross profit 1 6,772 6,002 12.8 % Adjusted gross margin 1 62.4% 62.9% (0.5)pts Cost inflation largely offs
Slide 20: Navigating cost inflation with positive operating leverage
Navigating cost inflation with positive operating leverage Adjusted operating profit1 £2.2bn +13.8% £2.5bn Standalone costs at the upper 22.8% 22.8% end of £0.2bn guided range Operating Over delivery of Pfizer Transactional Translational leverage FX loses FX impact synergies (>£0.6bn annualised deli
Slide 21: 3% Adjusted EPS growth driven by strong operating profit
3% Adjusted EPS growth driven by strong operating profit, offset by interest costs £m FY 2022 FY 2021 % change Adjusted operating profit 1 2,472 2,172 13.8 Net finance costs (207) (2) n/m Reflects interest of £258m related to bonds issued in March 2022 offset by interest Adjusted tax 1 (506) (469) 7
Slide 22: Strong free cash flow generation
Strong free cash flow generation £m FY 2022 FY 2021 Adjusted operating profit 1 2,472 2,172 P&L adjusting items 2 (647) (534) Separation and admission costs peaked in 2022 and a non-cash impairment charge Non-cash movements 3 424 216 Working capital and other movements 4 138 (188) Working capital ma
Slide 23: Debt reduction since demerger
Debt reduction since demerger c. 4.0x 3.6x c.3.1% Net debt / Adjusted EBITDA4 Net debt / Adjusted EBITDA4 Cost of debt £bn 87%/13% Fixed/floating 1 0.1 FX 9.9 Movement in cash on 7.8 years Net derivatives and movement hand Term loan Commercial in leases repayments Paper issued Duration 2 Net debt Ne
Slide 24: Debt profile
Short-term liquidity Debt profile The principal source of liquidity is cash generated from operations. Haleon has access to multiple sources of short-term finance: Bond debt and commercial paper maturity profile (£bn) • Cash and Cash Equivalents (£0.6bn at 31/12/22) • $1.4bn Revolving Credit Facilit
Slide 25: Outlook for full year 2023
Outlook for full year 2023 Organic revenue growth1 of 4-6% 1 Adjusted operating profit margin broadly flat (FY 2022: 22.8%) after absorbing c.40 bps adverse transactional 2 foreign exchange impact based on current market rates Net interest expense c. £350m Adjusted effective tax rate1 23-24% 1 Defin
Slide 26: Extraordinary year, successfully separated and unveiled Haleon
Extraordinary year, successfully separated and unveiled Haleon, a listed 100% consumer heath company Our strategy is working, delivering strong growth with opportunities across the business for this to continue FY22 saw strong top line growth with 6%1 adjusted operating profit growth despite signifi
Slide 27: Medium term guidance
Medium term guidance Organic annual sales growth of 4-6%1 Sustainable moderate adjusted operating margin expansion at constant currency 1 per annum Net debt/EBITDA2 expect to be below 3x during 2024 1 See appendix for definition 2 Adjusted EBITDA (see appendix for definition) 27
Slide 28: HAL=ON
HAL=ON
Slide 29: Appendix
Appendix 2022 Full year results
Slide 30: Glossary
Glossary A number of Adjusted measures are used to report the performance of our business which are • other items. These gains and losses are not directly attributable to the sale of the Group’s non-IFRS measures. Adjusted results, CER and other non-IFRS measures may be considered in products and va
Slide 31: IFRS and Adjusted Income Statement
IFRS and Adjusted Income Statement Unaudited Net amortisation Transaction Separation Disposals 2022 IFRS and impairment of Restructuring -related and Admission and Adjusted £m Results intangible assets1 costs2 costs3 costs4 others5 Results Revenue 10,858 — — — — — 10,858 Gross profit 6,577 172 19 —
Slide 32: Adjusting items largely non-cash impairment, separation and admission costs
Adjusting items largely non-cash impairment, separation and admission costs £m FY 2022 FY 2021 % change Adjusted operating profit 1 2,472 2,172 13.8 Net amortisation and impairment Includes £129m impairment related to a (172) (16) Preparation-H and a small brand in the of intangible assets 2 Ukraine
Slide 33: 2022 full year results
2022 full year results Sonya Ghobrial Rakesh Patel Emma White Head of Investor Relations Director Director Sonya.x.Ghobrial@Haleon.com Rakesh.x.Patel@Haleon.com Emma.x.White@Haleon.com +44 7392 784784 +44 7552 484646 +44 7823 523562