Haleon (HLN) Bernstein's 21st Pan European Annual Strategic Decisions Conference summary

Market perception and growth outlook

• Market confidence has improved, with share price and valuation reflecting increased trust over the past year.

• Medium-term organic growth guidance of 4-6% is seen as achievable, supported by three main categories and a strong emerging market presence.

• No need to enter new segments to achieve growth targets, though innovation and new launches, such as a sexual health brand, will contribute.

• Innovation is crucial, especially in oral care and vitamins, minerals, and supplements (VMS), with high innovation rates required.

• Over-the-counter medicines have lower innovation rates, with growth driven by unmet consumer needs and geographic or segment penetration.

Innovation, product launches, and category dynamics

• Launch of an erectile dysfunction product in the US aims for at least $100 million in sales if successful, with consumer education as a key focus.

• Two Rx-to-OTC switch projects remain active but face regulatory delays; their success would be incremental to growth targets.

• Voltaren's growth now relies on consumer education about topical versus systemic pain relief, with geographic expansion largely complete.

• Divestment of lower-growth brands has removed uncertainty and improved growth prospects for Digestive Health and Other.

• Oral care and VMS divisions are expected to grow ahead of their categories, with recent strong innovation and successful launches.

Competitive landscape and brand strategy

• Main competitors in oral care are also focused on growing the category, with premiumization driving higher growth rates.

• Sensodyne's therapeutic positioning and focus on sensitivity remain strong, with new products addressing overlapping needs like gum health.

• Careful brand management avoids dilution, as seen with the Clinical White launch and sub-brand strategies.

• Centrum's growth is driven by geographic expansion and a shift toward benefit-focused VMS, supported by clinical trials.