Haleon Plc · LSE:HLN
Haleon — Q3 2022 Earnings Presentation
26 slides from Haleon's earnings presentation, November 2022
Slide 1: 2022 Third quarter trading statement
2022 Third quarter trading statement November 2022
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
Slide 4: Strong third quarter performance with positive volume/mix
Strong third quarter performance with positive volume/mix Resilient profitability with inflationary pressures offset by operating leverage and efficiencies; standalone costs as expected Guidance: FY 22 sales guidance increased, Adjusted operating margin now expected to be to be slightly above last y
Slide 5: Q3 key financials
Q3 key financials £2.9bn 8.1% £725mn 25.1% Revenue Organic revenue Adjusted Adjusted growth operating profit 1 operating profit margin1 (20)bps 5.5% 2.6% +4.1% AER & Price Volume/mix CER growth1 (90)bps CER 1 Reconciliation of IFRS to Adjusted results can be found in the Appendix 5
Slide 6: Q3 2022 revenue growth
Q3 2022 revenue growth Delivering positive volume / mix and accelerated pricing £m +8.1% Organic revenue growth 8.0% 5.5% 0.0% 2.6% 2,892 Acquisitions, Foreign Price disposals and exchange 2,490 Volume/ mix MSA1 +16.1% Reported Q3 2021 Q3 2022 sales sales 1 Includes 0.3% from acquisitions, (0.1)% fr
Slide 7: Broad based growth across categories
Broad based growth across categories Improved pricing in Q3 Q3 Revenue Organic revenue growth1 £m 9M Q3 Q2 Q1 Decline driven by particularly strong Oral Health 787 6% 7% 2% 8% comparative in Q3 2021 (successful innovations, improved capacity, and benefit VMS 437 7% (1)% 9% 15% from Delta-Covid wave
Slide 8: Vitamins, Minerals & Supplements
Vitamins, Minerals & Supplements Q3 decline against a strong prior year comparative Currency Organic adjusted revenue revenue growth Volatile organic growth £m % given comparatives Q3 2021 404 17.8 Successful innovations, improved capacity, and benefit from Delta-Covid wave Q4 2021 395 6.9 Sales sus
Slide 9: Respiratory
Respiratory Strong growth in Q3 from increased demand and retailer stocking US market cold and flu sales ($m) Winter season Off season Winter season Q1 2022 ahead of 2019 Prolonged strong consumption Q4 2021 similar to 2019 levels in ‘off-season’ levels 250 2022 200 150 100 50 2021 2019 - Jan Feb Ma
Slide 10: Strong Q3 revenue growth across regions
Strong Q3 revenue growth across regions Revenue North North America America Asia Pacific 2.9% OSG 1 £1,101m (Q3 2021: £929m) EMEA & LatAm EMEA & LatAm 12.2% OSG 1 £1,136m (Q3 2021: £1,004m) Asia Pacific 9.0% OSG 1 £655m (Q3 2021: £557m) 1 Refers to Organic revenue growth; Reconciliation of IFRS to A
Slide 11: North America
North America Volume decline as expected given prior year advanced purchasing £1,101m Oral health Mid-single digit decline in VMS Down high-teens Respiratory Up mid-twenties percent Sensodyne given advance percent, reflecting strong driven by sustained Q3 22 Sales purchasing in Q3 2021 2021 comparat
Slide 12: EMEA & LatAm
EMEA & LatAm Strong price and volume / mix growth £1,136m Oral health Double digit growth in VMS Low-double digit Respiratory Up over 35% from sustained Sensodyne and strong growth underpinned by incidences of cold and flu Q3 22 Sales growth across continued successful and Covid-19 and retailer paro
Slide 13: Asia Pacific
Asia Pacific Strong volume / mix growth supported by price £655m Oral health Rebound in China VMS Mid-single digit growth Pain Relief Strong growth for Voltaren following easing of some supported by Caltrate; in China from distribution Q3 22 Sales restrictions slight decline in expansion, pricing an
Slide 14: Adjusted operating profit growth
Adjusted operating profit growth +4% at constant exchange rates and +15% at actual rates £m 110 (23) Inflationary pressures fully offset (61) 68 by pricing and efficiencies R&D 725 SG&A Translational Margin impacted as expected 631 Gross profit FX from ramp up of standalone costs +4.1% 90bps decline
Slide 15: Net debt
Net debt Reduction in net debt before FX moves since demerger £m Strong cash generation, focused on de-leveraging 10,784 £750m term loan repayments 10,707 from Commercial Paper issuance -604 681 and cash generation by end of Q3. Further £250m repaid in October 10,103 Sterling weakness has adversely
Slide 16: Outlook
Outlook for full year 2022 Organic revenue growth of 8.0 - 8.5% 1 Adjusted operating margin slightly ahead of 2021 levels assuming current exchange rates hold 2 1 Definitions of adjusted measures can be found in the Appendix 2 Assuming spot rates from 31 October 2022 16
Slide 17: Strong third quarter performance with positive volume/mix
Strong third quarter performance with positive volume/mix Resilient profitability with inflationary pressures offset by operating leverage and efficiencies; standalone costs as expected Guidance: FY 22 sales guidance increased, Adjusted operating margin now expected to be to be slightly above last y
Slide 18: 2022 Third quarter trading statement Q&A
2022 Third quarter trading statement Q&A November 2022
Slide 19: Appendix
Appendix
Slide 20: Glossary
Glossary A number of Adjusted measures are used to report the performance of our business Free cash flow is defined as net cash inflow from operating activities plus cash which are non-IFRS measures. Adjusted results, CER and other non-IFRS measures inflows from the sale of intangible assets, the sa
Slide 21: Medium term guidance
Medium term guidance Organic annual sales growth of 4-6%1 Sustainable adjusted operating margin expansion at constant currency 1 Net debt/EBITDA2 expect to be below 3x by the end of 2024 Initial dividend expected to be at the lower end of the 30-50% pay out range3 1 See appendix for definition 2 Adj
Slide 22: Reconciliation of organic growth
Reconciliation of organic growth Product Categories Digestive Respiratory Health and Q3 2022 vs 2021 (%) Oral Health VMS Pain Relief Health Others Total Revenue Growth 12.3 8.2 11.5 40.2 17.8 16.1 Organic Adjustments (0.2) (0.5) (0.5) (0.4) 1.4 - of which: Effect of Acquisitions (0.2) (0.5) (0.8) -
Slide 23: IFRS and Adjusted results
IFRS and Adjusted results Unaudited Q3 2021 Net amortisation and impairment Separation IFRS of intangible Restructuring and admission Disposals Adjusted £m results assets1 costs2 costs3 and others4 results Revenue 2,490 - - - - 2,490 Cost of sales (933) 15 11 - - (907) Gross profit 1,557 15 11 - - 1
Slide 24: Reconciliation of organic growth
Reconciliation of organic growth Product Categories Digestive Respiratory Health and 9m 2022 vs 2021 (%) Oral Health VMS Pain Relief Health Others Total Revenue Growth 8.0 13.3 13.3 46.0 8.5 14.4 Organic Adjustments (0.3) (0.2) (0.2) - 2.7 0.4 of which: Effect of Acquisitions (0.3) (0.3) (0.4) - - (
Slide 25: IFRS and Adjusted results
IFRS and Adjusted results Unaudited 9m 2021 Net amortisation and impairment Separation IFRS of intangible Restructuring and admission Disposals Adjusted £m results assets1 costs2 costs3 and others4 results Revenue 7,065 - - - - 7,065 Cost of sales (2,694) 36 36 - - (2,622) Gross profit 4,371 36 36 -
Slide 26: 2022 Third quarter trading statement
2022 Third 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