Haleon Plc · LSE:HLN
Haleon — Q1 2023 Earnings Presentation
25 slides from Haleon's earnings presentation, May 2023
Slide 1: 2023 First quarter trading statement
2023 First quarter trading statement May 2023
Slide 2: Disclaimer
Disclaimer This presentation contains certain statements that are, or may be These forward-looking statements and views may be based on a number deemed to be, “forward-looking statements” (including for purposes of of assumptions and, by their nature, involve known and unknown risks, the safe harbor
Slide 3: Tobias Hestler, CFO
Tobias Hestler CFO J
Slide 4: Strong first quarter performance with positive volume/mix
Strong first quarter performance with positive volume/mix Growth underpinned by strength of portfolio and exceptional execution Increased Adjusted operating profit mainly reflecting positive operational leverage Confident on FY23 guidance: More positive revenue expectations, as per AGM Trading Updat
Slide 5: Q1 key financials
Q1 key financials Revenue Adjusted operating profit1 £3.0bn 9.9% £691m 23.1% Revenue Organic revenue Adjusted Adjusted growth operating profit 1 operating profit margin1 +9.5% (90)bps 7.1% 2.8% AER & AER & Price Volume/mix +3.3 % (140)bps CER CER 1. Reconciliation of IFRS to Adjusted results can be
Slide 6: Q1 2023 revenue growth
Q1 2023 revenue growth Strong pricing with positive volume/mix £m +9.9% Organic revenue growth 3.8% 7.1% 2.8% 0.0% Translation 2,986 Price Acquisitions, Foreign Volume / mix exchange 2,627 disposals and MSA2 Impacted by Includes c. +1% impact comparative from from hyperinflation systems cutover in Q
Slide 7: Q1 organic growth
Q1 organic growth Organic Q1 2022 Q1 2023 revenue revenue revenue growth2 £m £m Q1 Oral Health 741 811 6.6% Strong start to the year Decline driven by particularly strong VMS 405 405 -3.7% comparative for Emergen-C in Q1 2022 in US from Omicron wave; Centrum up high-single Pain Relief 635 724 11.0%
Slide 8: Strong Q1 revenue growth across regions
Strong Q1 revenue growth across regions Revenue North North America America Asia Pacific 5.1% OSG 1 £1,072m (Q1 2022: £940m) EMEA & LATAM EMEA & LATAM 13.1% OSG 1 £1,198m (Q1 2022: £1,057m) Asia Pacific Developed markets1 Emerging markets1,2 11.7% OSG 1 £716m (Q1 2022: £630m) 6.1% 17.4% 1. Refers to
Slide 9: North America
North America Strong performance across categories; VMS down mainly driven by Emergen-C £1,072m Oral health Low-double digit growth VMS Down 20% reflecting Respiratory Up low-thirties percent strong Q1 2022 driven by strong incidences Q1 23 Sales in Sensodyne more than comparative from of cold and f
Slide 10: EMEA & LATAM
EMEA & LATAM Strong broad-based performance £1,198m Oral health High-single digit growth VMS Mid-single digit decline; Respiratory Up mid-thirties percent from in Sensodyne and strong Centrum saw high- sustained incidences of cold Q1 23 Sales double-digit growth in single digit growth and flu, Thera
Slide 11: Asia Pacific
Asia Pacific Strong volume / mix growth supported by price £716m Oral health Low-single digit growth VMS High single digit growth Pain Relief Up low-twenties percent with high-teens percent supported by mid-teens supported by strong Q1 23 Sales growth in parodontax; growth in Centrum; performance in
Slide 12: Q1 Adjusted operating profit growth
Q1 Adjusted operating profit growth +3% at constant exchange rates and +10% at actual rates £m 94 (25) 39 (48) 691 Transactional Translational Higher standalone costs given prior 631 FX FX year was as segment of GSK Incremental Operating standalone leverage ((180)bps) costs Strong operating leverage
Slide 13: Outlook
Outlook for full year 2023 Organic revenue growth1 towards the upper-end of 4-6% range Adjusted operating profit margin1 broadly flat (FY 2022: 22.8%) after absorbing c.40 bps adverse transactional foreign exchange impact based on current market rates2 Net interest expense c. £350m Adjusted effectiv
Slide 14: Strong first quarter performance with positive volume/mix
Strong first quarter performance with positive volume/mix Growth underpinned by strength of portfolio and exceptional execution Increased Adjusted operating profit mainly reflecting positive operational leverage Confident on FY23 guidance: More positive revenue expectations, as per AGM Trading Updat
Slide 15: 2023 First quarter trading statement Q&A
2023 First quarter trading statement Q&A May 2023
Slide 16: Appendix
Appendix
Slide 17: 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 18: 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) 18
Slide 19: Growth focused disciplined capital allocation
Growth focused disciplined capital allocation Investing Strengthen Shareholder M&A for growth balance sheet returns • Brand investment • De-lever to <3x net • Bolt-on M&A • Ordinary dividend debt/Adjusted EBITDA • R&D • Commercially • Return surplus capital during 2024 compelling to shareholders • S
Slide 20: Considerations on phasing of growth
Considerations on phasing of growth Comments on 2022 performance (unless otherwise stated) 2022 % of revenue Q1 Q2 Q3 Q4 ERP pull forward Reversal of ERP pull - Reduction in forward inventories at major Oral Health 27% retailers Rebound from China lockdown Benefit from - - - VMS 15% Omicron wave Ben
Slide 21: Full Year 2023 translational currency impact
Full Year 2023 translational currency impact 2022 Estimated translational currency foreign exchange impact as % of total Average Spot • c. (1.5)% on revenue Currency revenue 2022 21.4.23 • c. (1)% on adjusted operating USD 33% 1.24 1.24 profit EUR 16% 1.17 1.13 Assuming exchange rates incurred up CN
Slide 22: IFRS and Adjusted results
IFRS and Adjusted results Unaudited Q1 2022 Net amortisation and impairment Separation IFRS of intangible Restructuring Transaction and admission Disposals Adjusted £m results assets1 costs2 related costs3 costs4 and others5 results Revenue 2,627 - - - - - 2,627 Operating profit 466 28 13 - 127 (3)
Slide 23: Reconciliation of organic growth
Reconciliation of organic growth Product Categories Digestive Respiratory Health and Q1 2022 vs 2021 (%) Oral Health VMS Pain Relief Health Others Total Revenue Growth 5.7 16.4 18.0 51.0 0.6 13.9 Organic Adjustments — 0.1 0.3 — 4.8 1.2 of which: Effect of Acquisitions — — — — — — Effect of Disposals
Slide 24: Reconciliation of organic growth
Reconciliation of organic growth Geographical Segments EMEA and Q1 2022 vs 2021 (%) North America LatAm APAC Total Revenue Growth 20.1 8.0 15.8 13.9 Organic Adjustments 0.8 2.0 0.2 1.2 of which: Effect of Acquisitions - — — — Effect of Disposals 0.5 1.1 — 0.6 Effect of MSAs 0.3 0.9 0.2 0.6 Effect of
Slide 25: 2023 First quarter trading statement
2023 First quarter trading statement 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