Haleon PLC’s Earnings Call Highlights Growth Amid Challenges

Haleon PLC ((GB:HLN)) has held its Q4 earnings call. Read on for the main highlights of the call.

Haleon PLC’s recent earnings call revealed a generally positive sentiment, underscored by strong performances in emerging markets and the Oral Health segment. The company highlighted its strategic investments and innovation as key drivers of growth, despite facing challenges such as a weak cold and flu season, a disappointing launch of Eroxon, and currency headwinds. Nevertheless, Haleon remains optimistic about its growth prospects and is committed to returning capital to shareholders.

Strong Performance in Emerging Markets

Haleon reported significant momentum in emerging markets, particularly in India and China, which is expected to contribute to growth in the second half of 2025. This strong performance underscores the company’s strategic focus on expanding its presence in high-growth regions.

Oral Health Segment Expansion

The Oral Health segment has been a standout performer, with successful products like Clinical White and plans to expand into 12 additional markets. New launches, including clinical enamel repair in the US, are expected to further bolster this segment’s growth.

Innovation Driving Growth

Innovation continues to be a key growth driver for Haleon, with new products such as Otrivin Nasal Mist and Centrum Essentials contributing to market share gains and category growth. This focus on innovation is central to the company’s strategy.

Increased Investment in Growth

Haleon has increased its investment in growth by 10.2% in advertising and promotion, reflecting its confidence in the underlying business fundamentals and its commitment to sustaining growth momentum.

Capital Return to Shareholders

The company announced a £500 million share buyback and an increased dividend, demonstrating strong cash flow confidence and a commitment to returning capital to shareholders.

Impact of Weak Cold and Flu Season

A weaker-than-expected cold and flu season led to a 15% decline in the respiratory health category, affecting inventory levels both in the US and globally.

Disappointing Eroxon Launch

The launch of Eroxon fell short of expectations, with slower-than-anticipated early trial results, highlighting a challenge in the company’s product rollout strategy.

Currency Headwinds

Haleon is facing ongoing foreign exchange headwinds, which are expected to impact revenue and profit, particularly in the first half of 2025.

Challenges in US Retail Environment

Some US retailers, especially in the drug channel, are experiencing difficulties with inventory levels, which is affecting cash management and poses a challenge for Haleon.

Forward-Looking Guidance

Haleon’s guidance for 2025 projects a growth rate of 4% to 6%, despite a slow start due to a 15% decline in the cold and flu market and inventory adjustments. The company remains confident, with 71% of its business maintaining or gaining market share in 2024. Key growth drivers include strong momentum in emerging markets, robust Oral Health segment performance, and ongoing innovation. Haleon also plans a £500 million share buyback and maintains capacity for bolt-on mergers and acquisitions, despite currency headwinds.

In conclusion, Haleon PLC’s earnings call painted a picture of a company navigating challenges while capitalizing on growth opportunities. With a strong focus on emerging markets, innovation, and shareholder returns, Haleon is poised for continued growth, despite facing headwinds in the market.