Haleon (HLN) H2 2024 earnings summary

Executive summary

• Achieved 5% organic revenue growth and 9.8% organic profit growth in 2024, with 71% of business gaining or maintaining share and strong performance from power brands.

• Over £1 billion returned to shareholders via dividends and share buybacks, with a further £500 million allocated for 2025.

• Portfolio actively managed through divestments (ChapStick, NRT outside US) and increased stake in China JV to 88%.

• Productivity program delivered £150 million in annualized gross savings in 2024, on track for £300 million by 2025.

Financial highlights

• Organic revenue up 5%, driven by 3.7% pricing and 1.3% volume/mix; reported revenue at £11.2 billion, down 0.6% due to FX and divestments.

• Organic operating profit up 9.8%, adjusted operating profit margin at 22.3% (down 30 bps reported, up 100 bps organically).

• Free cash flow was £1.9 billion, supporting debt reduction and shareholder returns.

• Adjusted diluted EPS grew 3.5% to 17.9p, aided by lower net interest, lower non-controlling interest, and share buybacks.

Outlook and guidance

• Forecasting 4%-6% organic revenue growth for 2025, with organic profit growth ahead of revenue.

• Growth expected to be weighted to the second half due to a weak cold and flu season in Q1.

• Net interest expense expected around £270 million, with a 24% tax rate on adjusted profit.

• Medium-term guidance: 4-6% annual organic revenue growth, profit growth ahead of revenue, leverage target of ~2.5x net debt/EBITDA, and dividend growth at least in line with adjusted earnings.