Haleon raises FY operating profit outlook, pares back organic revenue guidance

(Sharecast News) - Consumer healthcare company Haleon hiked its interim dividend and raised its FY profit outlook on Wednesday after posting increased adjusted operating profits for H1, driven by productivity gains and margin expansion, but pared back its organic revenue growth forecast. Haleon said adjusted operating profits had risen 9.9% to £1.24bn, while organic revenues grew 3.2% to £5.48bn, with its EMEA & Latin America and Asia-Pacific units offsetting a slight decline in its North American operations.

The FTSE 100-listed group stated its oral health division led category growth, up 7.6% on an organic basis, supported by innovations in Sensodyne and Parodontax. Pain relief revenues rose 2.5%, while vitamins, minerals & supplements edged up 0.9%. Respiratory and digestive health declined slightly.

Gross profit margins expanded by 160bps organically, aided by supply chain efficiencies and pricing, while adjusted diluted earnings per share rose 2.2% to 9.2p. Free cash flow jumped £184m to £734m, excluding proceeds from its divestment of ChapStick. Haleon also declared an interim dividend of 2.2p per share, up 10% year-on-year.

As a result, Haleon upgraded its guidance to "high-single digit organic operating profit growth" for FY25 but warned that organic revenues would now only grow around 3.5%, down from a prior range of 4-6%, citing sluggish performance in its North American respiratory portfolio.

CEO Brian McNamara said: "We expect an improving trend for organic revenue growth in the second half, with innovations supporting a positive performance in EMEA & LatAm and Asia Pacific. The consumer environment in North America is likely to remain subdued.

"We remain encouraged by the opportunities for growth across the business and [are] confident in delivering our medium-term guidance."

As of 0915 BST, Haleon shares were down 2.0% at 357.60p.

Reporting by Iain Gilbert at Sharecast.com