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Highlights
- Q3 organic revenue growth reached 6.1%, driven by balanced gains in pricing and volume/mix.
- Strong Q3 operating profit growth of 7.4% organically, with a 23% adjusted operating profit margin.
- £1 billion returned to shareholders through dividends and buybacks, following strategic divestments.
Haleon plc (LSE/NYSE:HLN) has announced a robust third-quarter trading update for the year ending December 31, 2024. The company delivered strong organic revenue growth of 6.1%, driven by balanced gains in pricing (+3.3%) and volume/mix (+2.8%). This growth reflects the resilience of Haleon’s diversified product portfolio, with contributions from key brands like Sensodyne, parodontax, Advil, and Theraflu. However, reported revenue saw a slight decline of 0.6%, reflecting adverse currency effects.
For the first nine months, Haleon’s organic revenue growth stands at 4.4%, within the company’s full-year guidance of 4-6%. Strong growth was achieved across all categories and regions, highlighting the impact of innovation and effective in-market execution.
Segment Highlights:
- Power Brands Performance: Haleon’s Power Brands segment, including Sensodyne and Theraflu, grew by 5.4% organically in Q3, showcasing the strength of Haleon's focus on trusted consumer brands.
- Operating Profit: Q3 organic profit growth reached 7.4%, underpinned by gross margin expansion and cost efficiencies. This enabled further investment in advertising and promotion (A&P), leading to an adjusted operating profit margin of 23.0%, up 30 basis points organically. Over the nine-month period, Haleon’s adjusted operating profit margin improved by 120 basis points to 22.8%.
- Reported Profit: Reported operating profit rose by 20.7% to £705 million, driven partly by a £121 million gain from the divestment of its Nicotine Replacement Therapy (NRT) business outside the U.S.
Looking ahead, Haleon remains confident in achieving high-single-digit organic operating profit growth for the full year, supported by disciplined cost management and strategic focus on brand investment.
Strategic Moves and Capital Allocation: In line with its strategy to focus on core brands, Haleon raised approximately £0.8 billion through divesting non-core brands, including the completion of the NRT divestment outside the U.S. in September and the sale of ChapStick in May. These moves allowed Haleon to sharpen its brand focus and strengthen its balance sheet.
Additionally, Haleon has signed an agreement to acquire an additional 33% equity interest in its China Joint Venture (JV) for approximately £0.5 billion, increasing its ownership to 88% and reflecting its commitment to expanding in high-growth regions. Haleon also retains an option to acquire the remaining 12% interest, which could further boost its market presence in China.
Haleon demonstrated its commitment to shareholder returns, having returned over £1 billion to shareholders year-to-date through dividends and share buybacks. This includes £500 million allocated to share repurchases and £570 million in dividends, underscoring the company’s disciplined approach to capital allocation.
Outlook: With strong Q3 results and strategic moves to optimize its portfolio, Haleon is on track to achieve its 2024 growth targets.A
