Slide 1: 2023 Full year results
2023 Full year results February 2024
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: Brian McNamara, CEO
Brian McNamara CEO 2023 Full year results
Slide 4: Strong performance, with 8.0% organic revenue growth and 10.4% adjusted operating profit growth
Strong performance, with 8.0% organic revenue growth and 10.4% adjusted operating profit growth1 Our strategy is delivering, with growth across all categories and regions demonstrating portfolio resilience Implementing change to become more agile Proactively managing portfolio with disposals of Lami
Slide 5: Clear approach to deliver on growth ambitions
Clear approach to deliver on 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-build
Slide 6: Full year 2023 results and Q4 results
Full year 2023 results 8.0% 7.0%/1.0% 9.1% Organic sales growth1 Price / Volume Mix Power Brand growth Q4 results 6.7% 6.4%/0.3% Adjusted operating profit 1: Organic sales growth1 Price / Volume Mix Increased 10.4% constant currency and 10.8% organic growth Strong cash generation Strong FCF generati
Slide 7: Oral Health
Oral Health Outperformance: Exceptional Power Brand performance Winning innovations 10.6% Sensodyne parodontax Gum + Sensitivity & Breath Polident/Poligrip Power Max Hold+ FY organic sales growth1 Top two 2023 innovations in US Strong performance driving Launched in 2022 and now toothpaste market2:
Slide 8: Vitamins, minerals and supplements
Vitamins, minerals and supplements Return to growth in second half Centrum Emergen-C 0.9% Leveraging science Geo-expansion New delivery formats FY organic sales growth1 - Clinical trials showing - Further expanded Centrum - Launched Emergen-C participants taking Centrum distribution in India through
Slide 9: Over-the-counter: Pain Relief
Over-the-counter: Pain Relief Performance supported by improved capacity and strong execution Advil Voltaren Panadol 7.4% New pain indication Driving new formats Strong activation FY organic sales growth1 - Advil Dual Action Back: - Launch of Voltaren liquid - Success of ‘Release starts Tapping into
Slide 10: Over-the-counter: Respiratory Health
Over-the-counter: Respiratory Health Performance underpinned by strong first half and excellent execution Capturing demand 13.7% Otrivin Nasal Mist Robitussin Theraflu - Launched in first three - Launch of dual-action - Theraflu Max Strength FY organic sales growth1 European markets; Good lozenge La
Slide 11: Over-the-counter: Digestive Health & Other
Over-the-counter: Digestive Health & Other Broad based growth across all three sub-categories 6.5% - Digestive Health Tums and ENO leveraged innovation to capture strength in the immediate FY organic sales growth1 relief sub-category - Skin Health underpinned by Bactroban growth - Smoking Health rev
Slide 12: Strong execution and financial discipline
Strong execution and financial discipline Initiatives to Continued financial improve efficiency Strong go-to-market discipline execution - Ongoing initiatives such as dual - Active portfolio management; sourcing and complexity - New distribution model in place with disposal of Lamisil1 and reduction
Slide 13: Increasing agility and productivity across Haleon
Increasing agility and productivity across Haleon Strengthening c. £300m pa Partly reinvested Haleon gross cost to drive growth for long-term initiatives success • One third expected to be • Increased automation • 4-6% annual organic delivered in 2024 and process revenue growth improvement • Restruc
Slide 14: Health inclusivity – a key differentiated focus for Haleon
Health inclusivity – a key differentiated focus for Haleon Groupwide aim to empower 50 million people a year by 2025 to be more included in opportunities for better everyday health with over 41m people empowered in 2023 Polident Smiles can’t wait Caltrate Bone Health Advil Pain Equity Project Suppor
Slide 15: Tobias Hestler, CFO
Tobias Hestler CFO 2023 Full year results
Slide 16: Building our track record
Building our track record Continuing positive trajectory since demerger despite challenging environment Revenue £m Adjusted gross profit £m 11,302 7,001 10,858 6,772 9,892 6,173 £0.8bn 9,545 6,003 dividend payments Margin 62.4% 62.9% 62.4% 61.9% to shareholders1 2020 2021 2022 2023 2020 2021 2022 20
Slide 17: Delivering strong results
2023 Delivering strong results £11.3bn £2.5bn 22.6% Revenue Adjusted Adjusted operating profit 1 operating profit margin1 7.9 % 10.4% +50bps CER2 CER2 CER2 +60bps 8.0% 10.8% Organic3 Organic3 Organic3 1 Reconciliation of IFRS to Adjusted results can be found in the Appendix 2 Constant currency rates
Slide 18: Strong FY revenue growth
Strong FY revenue growth Driven by price with positive volume/mix £m +8.0% Organic revenue growth 7.0% 1.0% (0.1%) (3.8%) Price Net M&A2 Foreign 11,302 10,858 Volume/mix exchange Includes c.1% Driven by Sterling impact from strengthening high inflation against emerging countries1 market currencies +
Slide 19: Respiratory
Respiratory 2023 – 2024 cold and flu season to-date returning to pre-COVID levels Weekly US market cold and flu (million units) Trends in Europe similar to US. Geographies which lifted COVID- 25 C&F Season 19 restrictions later, such as China, saw elevated demand in 2021-22 Q4 2022 and Q1 2023 which
Slide 20: Vitamins, Minerals and Supplements
Vitamins, Minerals and Supplements Market share1 gains across the three largest VMS brands YTD2 Market growth 15.0% Haleon growth 10.0% Three key brands (c.85% of VMS revenue) outperforming the market2 5.0% Emergen-C return to growth last 0.0% three months3 Well positioned for future growth in -5.0%
Slide 21: Broad based growth across all regions
Broad based growth across all regions North America 2.7% OSG 1 Asia Pacific Revenue: £4,195m (2022: £4,116m) EMEA & LATAM 9.0% OSG 1 12.6% OSG 1 Revenue: £2,562m (2022: £2,472m) Revenue: £4,545m (2022: £4,270m) Developed markets Emerging markets 4.9 % OSG 1 14.5 % OSG1 67% of group sales 33% of grou
Slide 22: North America
North America FY growth driven by price; more favourable volume/mix in Q4 Sales Adjusted operating profit and margin Organic growth1 Price Volume / mix CER2 Organic growth1 FY 2.7% 3.6% (0.9)% FY 4.7% 4.8% Q4 3.5% 2.8% 0.7% £m £m Oral Health, Respiratory -14 Pricing Health, Pain Relief FX and FX and
Slide 23: EMEA & LATAM
EMEA & LATAM Strong price underpinning double digit organic growth Sales Adjusted operating profit and margin Organic growth1 Price Volume / mix CER2 Organic growth1 FY 12.6% 12.8% (0.2)% FY 12.6% 13.4% Q4 10.1% 11.9% (1.8)% £m £m All categories growing Pricing with Oral Health, Respiratory Health,
Slide 24: Asia Pacific
Asia Pacific Good organic growth more volume/mix driven Sales Adjusted operating profit and margin Organic growth1 Price Volume / mix CER2 Organic growth1 FY 9.0% 2.7% 6.3% FY 17.8% 17.6% Q4 6.8% 3.5% 3.3% £m £m Strong operating Oral Health, Respiratory leverage Health and Pain Relief (particularly
Slide 25: Adjusted operating profit +10.4% CER
Adjusted operating profit +10.4% CER % change £m FY 2023 FY 2022 % change (CER) H1: Cost inflation not fully offset by Revenue 11,302 10,858 4.1 7.9 pricing and efficiencies H2: Headwinds eased with gross Adjusted gross profit 1 7,001 6,772 3.4 7.3 margin expansion in Q4 % Adjusted gross margin 1 61
Slide 26: FY Adjusted operating profit growth
FY Adjusted operating profit growth +10.4% at constant exchange rates;+60bps operating leverage 266 (8) (181) £m Net +10.8% M&A2 Organic operating profit +10.8% (0.4)% with negative impact from M&A of (7.3)% (0.4)% Translational 2,549 FX Operating A&P up c.3%; targeted on key 2,472 leverage growth a
Slide 27: Adjusted EPS growth driven by strong operating profit
Adjusted EPS growth driven by strong operating profit partly offset by annualisation of interest costs % change £m FY 2023 FY 2022 % change (CER) Adjusted operating profit 1 2,549 2,472 3.1 10.4 Net finance costs (368) (207) 77.8 77.3 Annualisation of interest Adjusted tax 1 (512) (506) 1.2 9.7 % ta
Slide 28: Operating profit margin +90bps due to reduction in adjusting items
Operating profit margin +90bps due to reduction in adjusting items £m FY 2023 FY 2022 % change Adjusted operating profit 1 2,549 2,472 Net amortisation and impairment of Includes ChapStick impairment4 (224) (172) intangible assets 2 Increase largely due to productivity Restructuring costs 2 (169) (4
Slide 29: Strong free cash flow generation
Strong free cash flow generation £m FY 2023 FY 2022 Adjusted operating profit 1 2,549 2,472 P&L adjusting items 2 (553) (647) Working capital reduction largely due to lower Non-cash movements 3 586 424 receivables given reduced debtor days partially offset by higher inventory Working capital and oth
Slide 30: Leverage reduced to 3.0x
Leverage reduced to 3.0x – £2.2bn net debt reduction since de-merger £bn c. 4x 3.6x 3.0x c.3.6% Net debt / Adjusted EBITDA Net debt / Adjusted EBITDA1 Cost of bond debt2 -£2.2bn 10.7 77%/23% Fixed/floating 1 9.9 -0.6 Debt repayments -0.4 £1bn cash Cash -0.4 FX £0.4bn increase in FY23 8.5 revaluation
Slide 31: Optimising the portfolio to accelerate future growth
Optimising the portfolio to accelerate future growth Significant rationalisation done pre-listing Proactive portfolio management to drive further growth • Simplification of business • Increased focus on more attractive and consistent growth categories and brands • Acceleration of overall portfolio t
Slide 32: Disciplined capital allocation to deliver growth and attractive returns
Disciplined capital allocation to deliver growth and attractive returns Investing for growth M&A Shareholder returns • Brand investment • M&A • Grow ordinary dividends at least in line with adjusted earnings • R&D • Commercially compelling • Potential participation in Pfizer and • Sustainability • C
Slide 33: Shareholder returns
Shareholder returns Increased dividend payout ratio from 30% in 2022 to 35% in 2023 £0.8bn dividend payment to shareholders since demerger1 • Final proposed 2023 dividend of 4.2p per ordinary share • Total proposed 2023 dividend of 6p per ordinary share £500m share buyback announced 1 Includes FY 20
Slide 34: Considerations for FY 2024
Considerations for FY 2024 Organic revenue growth of 4-6% • Q1 just below the lower end of this range given tough comparatives relating to the strong cold and flu season in Q1 last year as well as the China rebound and performance of Advil in Canada Organic profit growth to be ahead of organic reven
Slide 35: Outlook for full year 2024
Outlook for full year 2024 Organic revenue growth1 of 4-6% Organic profit growth1 to be ahead of revenue growth Net interest expense c. £320m Adjusted effective tax rate1 24-25% 1 Definitions of adjusted measures can be found in the Appendix 35
Slide 36: Brian McNamara, CEO
Brian McNamara CEO 2023 Full year results
Slide 37: Medium term guidance
Medium term guidance Annual organic revenue growth of 4-6%1 Organic operating profit growth ahead of organic revenue growth Net debt/EBITDA2 of around 2.5x 1 See appendix for definition 2 Adjusted EBITDA (see appendix for definition) 37
Slide 38: Strong performance, with 8.0% organic revenue growth and 10.4% adjusted operating profit growth
Strong performance, with 8.0% organic revenue growth and 10.4% adjusted operating profit growth1 Our strategy is delivering, with growth across all categories and regions demonstrating portfolio resilience Implementing change to become more agile Proactively managing portfolio with disposals of Lami
Slide 39: Appendix
Appendix 2023 Full year results
Slide 40: Glossary
Glossary A number of adjusted measures are used to report the performance of our business which are • Disposal and other adjusting items: Gains and losses on disposals of assets, businesses and tax non-IFRS measures. Adjusted results, CER, organic and other non-IFRS measures may be indemnities relat
Slide 41: Broad based growth across categories
Broad based growth across categories FY23 Revenue Organic revenue growth1 £m FY Q1 Q2 Q3 Q4 Oral Health 3,136 10.6% 6.6% 15.4% 9.4% 11.5% VMS 1,640 0.9% (3.7)% 2.7% 1.4% 3.1% Pain Relief 2,652 7.4% 11.0% 14.9% 6.2% (1.8)% Respiratory Health 1,736 13.7% 33.0% 9.2% 4.2% 10.9% Digestive Health and Othe
Slide 42: Considerations for phasing of growth
Considerations for phasing of growth Key Weak comparative Considerations for 2024 performance (unless otherwise stated) Challenging comparative 2023 % of revenue Q1 Q2 Q3 Q4 Oral Health 28% VMS 15% Strong Fenbid demand Strong Fenbid demand Fenbid destocking (China) (China) Pain Relief 23% Strong Adv
Slide 43: Translational currency impact
Translational currency impact FY 2023 currency as % Average Average Spot Spot Currency of total revenue 2022 2023 31.12.23 16.2.24 2023 unfavourable USD 33% 1.24 1.24 1.27 1.26 translational foreign EUR 16% 1.17 1.15 1.15 1.17 exchange impact CNY 8% 8.31 8.81 9.06 9.08 • c. (3.8)% on revenue CAD <5%
Slide 44: IFRS and Adjusted Income Statement
IFRS and Adjusted Income Statement Unaudited Net amortisation Transaction Separation Disposals 2023 IFRS and impairment of Restructuring -related and Admission and Adjusted £m Results intangible assets1 costs2 costs3 costs4 others5 Results Revenue 11,302 11,302 Gross profit 6,747 224 26 — 4 — 7,001
Slide 45: Reconciliation of FY organic growth
Reconciliation of FY organic growth Product Categories Digestive Oral Pain Respiratory Health and 2023 vs 2022 (%) Health VMS Relief Health Other Total Revenue Growth 6.1 (2.1) 4.0 9.9 2.0 4.1 Organic Adjustments - - 0.2 - 0.5 0.1 Effect of Exchange Rates 4.5 3.0 3.2 3.8 4.0 3.8 Organic Revenue Grow
Slide 46: Reconciliation of quarterly organic growth
Reconciliation of quarterly organic growth North America EMEA & LatAm Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY 2023 vs 2022 (%) 2023 2023 2023 2023 2023 2023 vs 2022 (%) 2023 2023 2023 2023 2023 Revenue Growth 14.0 4.4 (7.5) (1.0) 1.9 Revenue Growth 13.3 11.2 1.7 0.2 6.4 Organic Adjustments - - 0.1 - Organic A
Slide 47: Free cash flow and Adjusted EBITDA
Free cash flow and Adjusted EBITDA Free cash flow Adjusted EBITDA2 Twelve months to 31 Dec Twelve months to 31 Dec £m £m 2023 2022 2023 2022 Net cash inflow from operating Adjusted operating profit2 2,100 2,063 2,549 2,472 activities Less: Capital expenditure1 Add: Depreciation – Property Plant and
Slide 48: Debt profile
Debt profile Net debt c.7.0 Group net debt at Group net debt at £m 31 Dec 2023 31 Dec 2022 years Short-term borrowings1 656 437 Long-term borrowings 8,800 10,003 Duration2 Derivative financial liabilities 190 206 c.3.6% Cash and cash equivalents and (1,044) (684) liquid investments Derivative financ
Slide 49: 2023 full year results
2023 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