2022 Half year results 

H1 revenue +13.4% to £5,188m, organic revenue growth +11.6%; 3.7% price and 7.9% volume/mix

Strong power brand performance in H1: +13.4% organic growth with Panadol, Theraflu, Otrivin, Advil and Centrum particularly strong

2/3 of our business gained or maintained share in the six months ended 30 June 20221

E-commerce 9% total sales, growth in the high teens

H1 Reported operating profit increased 22.1% to £900m, with margin 17.3% up 120bps

H1 Adjusted operating profit increased 21.2% to £1,191m, up 15.5% at constant currency (CER)

H1 Adjusted operating margin 23.0%, up 90bps (CER) and 150bps at reported rates

H1 net cash from operating activities was £680m, which included £224m related to the net cash outflow from separation, restructuring and disposals; Free cash flow for H1 2022 was £553m with free cash flow conversion of 102%

Net debt at 18 July 2022 was £10,707m; recently repaid £750m of £1.5bn term loan

FY22 organic revenue growth and Adjusted operating margin guidance unchanged from HY Trading update on 27 July 2022

Adjusted results			Reported results
Six months ended 30 June (unaudited)	2022	vs 2021		2022	vs 2021
Organic revenue growth2		11.6%3	Revenue	£5,188m	13.4%
Adjusted operating profit2	£1,191m	15.5%3	Operating profit	£900m	22.1%
Adjusted operating profit margin2	23.0%	90 bps3	Operating profit margin	17.3%	120 bps
Adjusted earnings per share2	9.6p	21.5%	Earnings per share	5.6p	5.7%
Free cash flow2	£553m	£364m	Net cash from operating activities	£680m	£446m

Outlook

FY2022 revenue and Adjusted operating margin guidance remains unchanged from the trading update on 27 July 2022.

FY2022 organic revenue growth is expected to be 6-8%

Adjusted operating margin in FY2022 is expected to be slightly down at constant currency on last year (FY21: 22.8%). Strong growth, the Pfizer synergies, pricing and ongoing supply efficiencies, will largely offset Haleon standalone costs (£175-£200m), continued investment, inflationary cost pressure and the impact of Russia and Ukraine. Assuming current spot rates are sustained for the rest of the year, currency will be slightly positive on adjusted operating margin.

In FY2022, the Adjusted effective tax rate is now expected to be at the lower end of the 22-23% range shared previously. FY2022 net interest expense is unchanged at £0.2bn and net capex guidance is unchanged from prior guidance, and remains c.3% sales.

Separation and Admission costs are now expected to be approximately £0.5bn (at current spot rates) between FY2022 and FY2024, with 80% of costs incurred in FY2022, and the balance split across FY2023 and FY 2024. Admission costs are expected to be just over £0.1bn. (Previously, Separation and Admission costs were expected to be approximately £0.4bn between FY2022 and FY2024, including Admission costs of up to £0.1bn most of which were expected to be incurred in FY2022). 

All medium term guidance is reiterated, namely annual organic revenue growth of 4-6%, sustainable moderate Adjusted operating margin expansion at constant currency, Net debt/Adjusted EBITDA expected to be below 3x by the end of 2024 and initial dividend expected to be at lower end of 30-50% pay-out range (subject to Haleon Board approval). 

Current trading

Positive momentum seen in the first half of the year has continued into the third quarter, albeit at a slower rate as expected, underpinning our guidance for FY2022 organic growth of 6-8%. We believe the business is well positioned to navigate the current macro-economic challenges including rising inflation and the potential impact this may have on consumer behaviour in the future.

Update on Zantac

As Haleon stated in the Group’s announcement on 11 August 2022, Haleon is not a party to any Zantac claims.

Haleon has notified GSK and Pfizer that it rejects their requests for indemnification on the basis that the scope of the indemnities set out in the joint venture agreement only covers their consumer healthcare businesses as conducted when the JV was formed in 2018. At that time, neither GSK nor Pfizer marketed OTC Zantac in the US or Canada.

Financial reporting calendar
Q3 2022 Trading Statement	10 November 2022
FY 2022 Results	March 2023
Q1 2023 Trading Statement	May 2023
HY 2023 Results	August 2023

Enquiries
Investors		Media
Sonya Ghobrial	+44 7392 784784	Zoe Bird	+44 7736 746167
Rakesh Patel	+44 7552 484646	Nidaa Lone	+44 7841 400607
Emma White	+44 7792 750133	Ross Whittam	+44 7796 204198
Email: [email protected]		Email: [email protected]

About Haleon plc

Haleon (LSE: HLN, NYSE: HLN) is a global leader in consumer health, with brands trusted by millions of consumers globally. The group employs over 22,000 people across 170 markets, who are united by Haleon’s purpose - to deliver better everyday health with humanity. Haleon’s product portfolio spans five major categories - Oral Health, Vitamins, Minerals and Supplements (VMS), Pain Relief, Respiratory Health, Digestive Health and Other. Its long-standing brands - such as Advil, Sensodyne, Panadol, Voltaren, Theraflu, Otrivin, Polident, Parodontax and Centrum - are built on trusted science, innovation and deep human understanding.

For more information, please visit www.haleon.com

For the full report please view here.

1. _{Market share statements throughout this report are estimates based on the Group’s analysis of third party market data of revenue for the first six months of 2022 including IQVIA, IRI and Nielsen data. Represents % of brand-market combinations gaining or maintaining share (this analysis covers > 85% of Haleon’s total revenue).}
2. _{Organic revenue growth, Adjusted operating profit, Adjusted operating profit margin, Adjusted earnings per share and Free cash flow are non-IFRS measures; definitions and calculations of non-IFRS measures can be found on pages 38 to 45}
3. _{Change at constant currency}
4. _{The commentary in this announcement contain forward-looking statements and should be read in conjunction with the cautionary note on page 38}