Financial Performance - 2022 revenue reached £10.9 billion, representing a 13.8% increase from £9.5 billion in 2021[18] - Operating profit increased to £1.8 billion, with an operating profit margin of 16.8%[18] - Free cash flow for 2022 was £2.1 billion, up from £1.4 billion in 2021[19] - Adjusted operating profit reached £2.5 billion in 2022, compared to £2.2 billion in 2021, maintaining an adjusted operating profit margin of 22.8%[86] - Revenue increased to £10.9 billion in 2022, up from £9.5 billion in 2021, representing a growth of approximately 14.7%[85] - Organic revenue growth was 9.0%, with 2/3 of the business gaining or maintaining market share[23] - Organic revenue growth for 2022 was 9.0%, with a medium-term guidance of 4-6% annual organic revenue growth[96][97] - Haleon reported a strong revenue growth of 13.8% and organic revenue growth of 9.0% for 2022, driven by both volume and price growth[46] Strategic Goals - The company aims for annual organic revenue growth of 4-6% and moderate adjusted operating margin expansion in the medium term[33] - The company aims for a medium-term guidance of 4-6% annual organic revenue growth, supported by a strong brand portfolio and disciplined execution of its strategy[48] - Haleon has identified opportunities for annualized gross cost savings of £300 million over the next three years through increased agility and productivity[54] - The company aims to maintain its pay-out ratio around the current level, subject to Board approval, as part of its capital allocation priorities[39] - The company plans to mitigate inflationary cost pressures through initiatives like early forward buying and supply chain improvements[74] Innovation and Product Development - The company launched 52 new products, line extensions, and upgrades during the year[24] - The company has delivered more than 19,000 regulatory approvals in the last three years, showcasing its commitment to R&D and innovation[78] - In 2022, the company invested £303 million in R&D, launching 52 new innovations and progressing over 250 active projects[147] - The company launched natural product variants in 2022, including Theraflu Naturals and Emergen-C Botanicals, targeting younger consumers[148] - The company is progressing two active Rx-to-OTC switch projects, recognizing the long-term commitment required for regulatory processes[148] Sustainability and Environmental Initiatives - The company invested approximately £9 million in a solar farm in Puerto Rico, enhancing its sustainability efforts[28] - The company aims to achieve 100% reduction in net Scope 1 and 2 carbon emissions by 2030, having already achieved 100% renewable electricity across its sites[109][110] - The company aims to achieve net zero carbon emissions from source to sale by 2040, with a 41% reduction in net Scope 1 and 2 carbon emissions reported in 2022 compared to the 2020 baseline[167] - Haleon plans to reduce virgin petroleum-based plastic usage by 10% by 2025 and by one-third by 2030, with 65% of packaging being recycle-ready in the 2022 reporting period[167] - In 2022, 92% of Haleon's palm oil derivatives were mass-balance RSPO certified, with a focus on sustainable sourcing by 2030[167] - The company aims to achieve TRUE Certification at its manufacturing sites by 2030 and AWS standard by 2025, with plans for water neutrality in water-stressed basins by 2030[167] - Haleon has set a target to reduce net Scope 1 and 2 carbon emissions by 100% by 2030, using 2020 as the baseline[167] Market Position and Consumer Engagement - The company has a strong portfolio with leading positions in five global market categories, contributing to 58% of total revenue[16] - E-commerce accounted for 9% of total sales, indicating increased channel penetration[23] - E-commerce sales grew 16% to represent 9% of total sales in 2022, with significant growth in the US (7%) and China (40%)[150] - The company is committed to expanding its e-commerce channel to mid-teens as a percentage of group sales by 2025[150] - The Haleon 'HealthPartner' portal attracted 3.6 million new users, with 30,000 hours of webinar content engaged[126] Employee Engagement and Diversity - The percentage of women in leadership roles reached 43.7%, with a goal of achieving gender parity globally by 2030[111] - The overall employee engagement index score for 2022 was 80%[126] - Haleon is focused on building high-performing, diverse teams and launched 'The Haleon Experience' to enhance employee engagement in 2022[176] - In 2022, 80% of employees reported that Haleon is fulfilling its core engagement values, indicating strong employee engagement[185] - Haleon aims to achieve gender parity in its leadership community globally by 2030, with a target of 48-52% representation[190] - The company introduced a Global Parental Leave Policy in 2022, providing 26 weeks of fully paid leave for all new parents[192] - Haleon has established a Global DEI Council that meets quarterly to drive accountability for diversity, equity, and inclusion initiatives[191] - The company introduced a Global Caregiver Leave Policy in 2022, offering four weeks of fully paid leave for employees caring for loved ones[182] Community and Social Responsibility - Haleon donated over £1.7 million to the British Red Cross Ukraine Crisis Appeal in 2022 and launched the 'Haleon Helps' volunteering program in February 2023[167] - The Otrivin educational program has reached 3,000 school children and is being expanded across the UK, Poland, India, and Egypt[163] - The company is committed to integrating human rights into its business operations, with annual human rights risk assessments planned[170] Compliance and Risk Management - The company aims to maintain compliance with updated regulatory standards through engagement with governments and industry regulators[126] - The company maintained a 100% success rate in regulatory inspections across its internal supply network in 2022[153] - Haleon conducted a detailed analysis of its business in 2022 following TCFD recommendations to understand climate-related risks and opportunities[197]

Financial Performance - 2022 revenue reached £10.9 billion, representing a 13.8% increase from £9.5 billion in 2021[25] - Organic revenue growth was 9.0%, compared to a decline of 3.5% in 2021[25] - Operating profit margin improved to 16.8%, up from 17.2% in 2021[25] - Haleon reported strong revenue growth of 13.8% and organic revenue growth of 9.0% for 2022, driven by volume and price growth[48] - Adjusted operating profit increased from £2.1 billion in 2020 to £2.5 billion in 2022, reflecting a strong business model[80] - The company maintained a healthy balance of organic growth in 2022 with a 4.3% price increase and a 4.7% volume/mix growth[147] Growth Strategy - The company aims for annual organic revenue growth of 4-6% and sustainable moderate margin expansion[35] - Haleon aims for medium-term guidance of 4-6% annual organic revenue growth, supported by a strong brand portfolio and disciplined execution of strategy[50] - Haleon has identified significant growth opportunities in emerging markets, particularly in China and India[56] - The company is focused on increasing household penetration of its products and expanding its portfolio across channels and geographies[54] - The company aims to continue driving market share gains through brand building and increased investment in A&P and R&D[93] Product Development - A total of 52 product launches were executed, including new products and line extensions[30] - In 2022, Haleon launched 52 new innovations with an Adjusted R&D expenditure of £303 million, progressing over 250 active projects across all categories[141] - Haleon launched natural product variants in 2022, including Theraflu Naturals and Emergen-C Botanicals, targeting younger consumers[144] E-commerce and Sales Channels - E-commerce accounted for 9% of total sales, indicating increased channel penetration[30] - E-commerce sales grew by 16% in 2022, accounting for 9% of total sales, with the US and China seeing growth rates of 7% and 40% respectively[144] - Haleon aims to increase e-commerce sales to the mid-teens percentage by 2025, focusing on improving content and optimizing media[144] Financial Management - The company plans to reduce net debt/Adjusted EBITDA to less than 3x by 2024[35] - Net debt to Adjusted EBITDA ratio was 3.6x as of December 31, 2022, with a target to reduce it to below 3x by 2024[88][90] - The company has repaid £1.5 billion of its term loan since demerger, supported by strong cash flow and disciplined capital allocation[89] Environmental Commitment - The company aims to achieve 100% reduction in net Scope 1 and 2 carbon emissions by 2030, having already achieved 100% renewable electricity across its sites[98][99] - 65% of Haleon's packaging is recycle-ready, with a goal to develop recycle-ready solutions for all product packaging by 2025[103][105] - Haleon aims to achieve net zero carbon emissions from source to sale by 2040, with a 41% reduction in net Scope 1 and 2 carbon emissions reported in 2022[160][162] - The company plans to reduce the use of virgin petroleum-based plastic by 10% by 2025 and by one-third by 2030, based on the 2020 baseline[162] Employee Engagement and Culture - Employee engagement survey indicated that 80% of employees feel Haleon is fulfilling its core index measures, with a focus on improving identified areas[106] - The overall employee engagement index score for 2022 was 80%, with areas for improvement identified in work processes and opportunities for growth[21] - Haleon aims to achieve gender parity in its leadership community globally by 2030, targeting a representation of 48-52%[184] - The Global Parental Leave Policy provides 26 weeks of fully paid leave for all new parents, regardless of gender or family structure[187] Community and Social Responsibility - Haleon empowered 22.4 million people through health inclusivity initiatives in 2022, with a goal to reach 50 million by 2025[155] - Haleon donated over £1.7 million to the British Red Cross Ukraine Crisis Appeal in 2022 and launched the 'Haleon Helps' volunteering program in February 2023[157] Governance and Risk Management - The company is committed to upholding the UN Guiding Principles on Business and Human Rights and conducts annual human rights risk assessments[166] - Haleon has established a Global DEI Council to oversee diversity, equity, and inclusion initiatives, meeting quarterly to set priorities[186] - The company emphasizes the importance of embedding risk management in daily business operations[208]

[FY2022 Financial & Operational Highlights](index=1&type=section&id=Haleon%20Full%20Year%20Results%202022) Haleon's first full year as a standalone company demonstrated strong financial performance, strategic outlook, and capital allocation, alongside updates on key legal matters [FY 2022 Key Performance Summary](index=1&type=section&id=FY%202022%20Key%20Performance%20Summary) Haleon reported strong first-year results with significant revenue and profit growth, balanced organic expansion, and robust free cash flow FY 2022 Key Financial Metrics | Financial Metric | 2022 (£m) | Change vs 2021 | | :--- | :--- | :--- | | **Revenue** | 10,858 | +13.8% | | Organic Revenue Growth | 9.0% | - | | - Price Component | 4.3% | - | | - Volume/Mix Component | 4.7% | - | | **Adjusted Operating Profit** | 2,472 | +13.8% (+5.9% at CER) | | Adjusted Operating Profit Margin | 22.8% | Flat YoY | | **Reported Operating Profit** | 1,825 | +11.4% | | **Adjusted Diluted EPS** | 18.4p | +2.8% | | **Free Cash Flow** | 1,579 | +£406m | | **Net Debt** | 9,868 | - | - **Two-thirds** of the business gained or maintained market share in 2022, reflecting strong brand performance and execution[5](index=5&type=chunk)[6](index=6&type=chunk) - Power Brands demonstrated strong performance with **10.1% organic growth**, outpacing overall company growth[5](index=5&type=chunk)[23](index=23&type=chunk) [2023 Outlook & Strategic Initiatives](index=2&type=section&id=Outlook) For FY2023, Haleon anticipates 4-6% organic revenue growth and broadly flat adjusted operating profit margin, alongside plans for c.£300m gross cost savings FY2023 Guidance | Metric | FY2023 Guidance | | :--- | :--- | | Organic Revenue Growth | 4-6% | | Adjusted Operating Profit Margin | Broadly flat (after c.40 bps adverse FX impact) | | Net Interest Expense | c. £350m | | Adjusted Effective Tax Rate | 23-24% | - The company plans to achieve **c.£300 million** in annualised gross cost savings over the **next 3 years**, with benefits primarily realized in **FY2024 and FY2025**[18](index=18&type=chunk) - Haleon will be proactive in managing its portfolio, remaining open to bolt-on acquisitions and divestments[18](index=18&type=chunk) [Shareholder Returns & Capital Allocation](index=2&type=section&id=Dividend) Haleon proposed an inaugural final dividend of 2.4p per share, reflecting a 30% payout ratio, and rapidly reduced net debt, expecting to reach under 3x leverage by 2024 - An inaugural final dividend of **2.4p per share** has been proposed for the trading period since the demerger on July 18, 2022[5](index=5&type=chunk)[13](index=13&type=chunk) - The dividend represents a payout ratio of approximately **30%** of adjusted earnings for the post-listing period, a level the company intends to maintain[13](index=13&type=chunk)[15](index=15&type=chunk) - Net debt was reduced from **£10,707m** at demerger to **£9,868m** by year-end, with confidence in reaching a net debt/Adjusted EBITDA ratio of **under 3x** during **2024**[40](index=40&type=chunk) [Litigation Update](index=2&type=section&id=Update%20on%20litigation) Haleon reached a settlement for the majority of PPI cases, with the financial impact not considered material to the Group's financial position - A settlement was reached to resolve the vast majority of PPI cases (Nexium24HR and Prevacid24HR)[5](index=5&type=chunk)[12](index=12&type=chunk) - The financial impact is not material to the Group's financial position, results of operations, or cash flows[12](index=12&type=chunk) [Business and Operational Review](index=3&type=section&id=Business%20and%20Operational%20Review) Haleon's business review highlights strong performance across product categories and geographies, driven by innovation, marketing, and operational efficiencies post-demerger [Performance by Product Category](index=3&type=section&id=Performance%20by%20Product%20Category) Haleon's portfolio delivered strong results, led by Respiratory Health's exceptional growth, with Pain Relief and Oral Health also showing robust performance Revenue and Growth by Product Category | Product Category | Revenue 2022 (£m) | Reported Growth (%) | Organic Growth (%) | | :--- | :--- | :--- | :--- | | Oral Health | 2,957 | 8.6% | 5.6% | | VMS | 1,675 | 11.6% | 5.0% | | Pain Relief | 2,551 | 14.0% | 8.9% | | Respiratory Health | 1,579 | 39.5% | 32.6% | | Digestive Health and Other | 2,096 | 7.4% | 2.9% | | **Group Total** | **10,858** | **13.8%** | **9.0%** | [Oral Health](index=3&type=section&id=Oral%20Health) Oral Health achieved 5.6% organic growth, driven by market share gains from Sensodyne, parodontax, and Polident/Poligrip, supported by innovation and expansion - Sensodyne delivered **mid-single digit growth**, with strong performance in India and the Middle East & Africa, though sales in China declined due to lockdowns[55](index=55&type=chunk) - parodontax grew **high-single digits**, with low-teens growth in North America, supported by strong consumption and innovation[55](index=55&type=chunk) - Denture care revenue was up **high-single digits**, driven by strong growth in EMEA and LatAm[55](index=55&type=chunk) [Vitamins, Minerals and Supplements (VMS)](index=3&type=section&id=Vitamins,%20Minerals%20and%20Supplements%20(VMS)) VMS grew 5.0% organically, gaining market share, with Centrum showing mid-single digit growth and Emergen-C attracting younger households - Centrum revenue increased **mid-single digits**, with good growth in APAC and EMEA & LatAm[55](index=55&type=chunk) - Emergen-C revenue was up **low-single digits**, benefiting from innovations like Emergen-C Kidz[55](index=55&type=chunk) - A clinical study on Centrum Silver demonstrated positive results on cognitive capabilities in adults 65+, providing a new claim for the product[25](index=25&type=chunk) [Pain Relief](index=3&type=section&id=Pain%20Relief) Pain Relief delivered 8.9% organic growth, with Panadol and Advil as standout performers, benefiting from increased demand during the cold and flu season - Panadol revenue grew **high-teens percent**, with double-digit growth across all three regions[55](index=55&type=chunk) - Advil revenue grew **low-double digits**, benefiting from increased incidences of Flu, Covid, and RSV[55](index=55&type=chunk) - Voltaren revenue grew by a **low-single digit**, with high single-digit growth in the US and mid-single-digit growth in China[55](index=55&type=chunk) [Respiratory Health](index=3&type=section&id=Respiratory%20Health) Respiratory Health saw exceptional 32.6% organic growth due to a severe cold and flu season, significantly contributing to overall Group sales - The strong cold and flu season added **3%** to Group organic sales growth in 2022, with sales up **c.30%** compared to 2019[28](index=28&type=chunk)[55](index=55&type=chunk) - Theraflu and Robitussin revenues grew by **over 50%**, while Otrivin was up **over 30%**[55](index=55&type=chunk) [Performance by Geography](index=5&type=section&id=Performance%20by%20Geography) All geographic segments contributed to growth, with EMEA and LatAm leading, while North America saw significant margin expansion despite overall margin declines in other regions due to standalone costs Revenue, Growth, and Margin by Region | Region | Revenue 2022 (£m) | Organic Growth (%) | Price / Vol-Mix (%) | Adj. Op. Profit Margin (%) | Margin Change (CER) (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | North America | 4,116 | 5.9% | 2.9% / 3.0% | 26.0% | +1.3% | | EMEA and LatAm | 4,270 | 10.9% | 6.4% / 4.5% | 22.9% | -2.0% | | APAC | 2,472 | 10.6% | 2.6% / 8.0% | 20.5% | -1.2% | [North America](index=6&type=section&id=North%20America) North America delivered 5.9% organic revenue growth, driven by Respiratory and Pain Relief, with adjusted operating margin expanding significantly to 26.0% - Respiratory Health grew **mid-thirties percent**, with Cold and Flu sales significantly ahead of 2019 levels[63](index=63&type=chunk) - Pain Relief grew **high-single digits**, led by Advil[63](index=63&type=chunk) - Adjusted operating margin increased to **26.0%** (**+250bps AER**, **+130bps CER**), driven by pricing and productivity[63](index=63&type=chunk) [EMEA and LatAm](index=6&type=section&id=EMEA%20and%20LatAm) EMEA and LatAm achieved strong 10.9% organic revenue growth, broad-based across categories, though adjusted operating margin declined to 22.9% due to standalone costs and FX - LatAm and the Middle East & Africa saw strong **double-digit** revenue growth[63](index=63&type=chunk) - Respiratory Health grew **low-thirties percent** due to a strong cold and flu season[63](index=63&type=chunk) - Adjusted operating margin decreased to **22.9%** (**-190bps AER**, **-200bps CER**), impacted by standalone costs and transactional FX[63](index=63&type=chunk) [Asia-Pacific](index=6&type=section&id=Asia-Pacific) APAC reported 10.6% organic revenue growth, driven by volume/mix and strong performance in South-East Asia, Taiwan, and India, despite a margin decline to 20.5% - Performance in South-East Asia, Taiwan, and India was exceptionally strong, with growth **over 20%**[63](index=63&type=chunk) - Pain Relief revenue grew in the **twenties percent**, led by Panadol[63](index=63&type=chunk) - Adjusted operating margin decreased to **20.5%** (**-100bps AER**, **-120bps CER**) due to increased A&P investment and standalone costs[63](index=63&type=chunk) [Key Growth Drivers and Operational Efficiency](index=3&type=section&id=Key%20Growth%20Drivers%20and%20Operational%20Efficiency) Growth was driven by innovation, marketing, and e-commerce expansion, while operational efficiency was achieved through successful GSK separation and Pfizer transaction synergies - E-commerce grew **16%** to **9%** of total sales, with strong growth in the US (**+7%**) and China (**+40%**)[34](index=34&type=chunk) - Consumer-facing A&P spend (excluding Russia) was up **6% (CER)**, with increased investment in streaming, retail media, and e-commerce search[32](index=32&type=chunk)[33](index=33&type=chunk) - The company successfully separated from GSK, incurring **c.£0.2bn** in standalone costs for the year[36](index=36&type=chunk) - Aggregate annual synergies from the Pfizer transaction reached **over £600m**, an increase from the **£500m** guided at Capital Markets Day[37](index=37&type=chunk) [Corporate Responsibility](index=4&type=section&id=Running%20a%20responsible%20business) Haleon is committed to responsible business practices, making significant progress on environmental sustainability and promoting health inclusivity through strategic initiatives [Environmental Initiatives](index=4&type=section&id=Environmental%20Initiatives) Haleon is on track with environmental goals, achieving 100% renewable electricity and progressing towards 100% recycle-ready packaging by 2025 - On track to reduce Scope 1 and 2 carbon emissions by **100%** by **2030** (vs 2020 baseline)[43](index=43&type=chunk) - Achieved **100%** renewable electricity across all directly controlled Haleon sites in **2022**[43](index=43&type=chunk) - Progressing towards making all product packaging recycle-ready by **2025**, with over **350 million** recycle-ready toothpaste tubes launched in **2022**[44](index=44&type=chunk) [Health Inclusivity](index=4&type=section&id=Health%20Inclusivity) Haleon aims to empower 50 million people annually by 2025 through initiatives like the Health Inclusivity Index and the Microsoft Seeing AI app - The company aims to empower **50 million** people a year by **2025** to be more included in opportunities for better everyday health[45](index=45&type=chunk) - Collaborated with Microsoft on the Seeing AI app to help blind or visually impaired consumers access product label information by scanning barcodes[46](index=46&type=chunk) [Consolidated Financial Statements (unaudited)](index=6&type=section&id=Consolidated%20Financial%20Statements%20(unaudited)) Haleon's consolidated financial statements for FY2022 reflect strong operating cash flow, significant debt assumption post-demerger, and a decline in reported profit after tax [Income Statement](index=6&type=section&id=Income%20statement%20summary) Haleon's FY2022 income statement shows increased revenue and operating profit, but profit after tax and diluted EPS declined due to higher finance costs and tax Consolidated Income Statement Summary | Account | 2022 (£m) | 2021 (£m) | % Change | | :--- | :--- | :--- | :--- | | Revenue | 10,858 | 9,545 | 13.8% | | Gross profit | 6,577 | 5,950 | 10.5% | | Operating profit | 1,825 | 1,638 | 11.4% | | Profit before tax | 1,618 | 1,636 | (1.1)% | | Profit after tax for the year | 1,119 | 1,439 | (22.2)% | | Profit attributable to shareholders | 1,060 | 1,390 | (23.7)% | | Diluted earnings per share (pence) | 11.5p | 15.1p | (23.8)% | [Balance Sheet](index=8&type=section&id=CONSOLIDATED%20BALANCE%20SHEET%20(unaudited)) Haleon's FY2022 balance sheet shows a slight increase in total assets, a substantial rise in liabilities due to new borrowings, and a corresponding decrease in total equity Consolidated Balance Sheet Summary | Account | As at 31 Dec 2022 (£m) | As at 31 Dec 2021 (£m) | | :--- | :--- | :--- | | **Total Assets** | **34,815** | **34,451** | | Intangible assets | 28,436 | 27,195 | | Total current assets | 4,059 | 5,251 | | **Total Liabilities** | **18,358** | **7,971** | | Long-term borrowings | 10,003 | 87 | | Total current liabilities | 4,370 | 4,238 | | **Net Assets** | **16,457** | **26,480** | | **Total Equity** | **16,457** | **26,480** | [Cash Flow Statement](index=10&type=section&id=CONSOLIDATED%20CASH%20FLOW%20STATEMENT%20(unaudited)) Haleon's FY2022 cash flow statement indicates strong operating cash inflow, significant investing outflow due to related party loans, and financing inflow from new borrowings Consolidated Cash Flow Statement Summary | Activity | 2022 (£m) | 2021 (£m) | | :--- | :--- | :--- | | Net cash inflow from operating activities | 2,063 | 1,356 | | Net cash outflow from investing activities | (8,784) | (33) | | Net cash inflow/(outflow) from financing activities | 6,911 | (1,236) | | **Increase in cash and cash equivalents** | **190** | **87** | [Net Debt](index=7&type=section&id=Net%20debt) Haleon's net debt stood at £9,868m at year-end 2022, a significant shift from a net cash position in 2021, primarily due to demerger-related borrowings Net Debt Position | Component | As at 31 Dec 2022 (£m) | As at 31 Dec 2021 (£m) | | :--- | :--- | :--- | | Cash and cash equivalents | 684 | 414 | | Short-term borrowings | (437) | (79) | | Long-term borrowings | (10,003) | (87) | | Derivative financial instruments (Net) | (112) | (2) | | **Net Debt / (Cash)** | **(9,868)** | **246** | [Non-IFRS Measures & Reconciliations](index=11&type=section&id=Use%20of%20non-IFRS%20measures%20(unaudited)) Haleon provides reconciliations for non-IFRS measures like Adjusted Results, Organic Revenue Growth, Adjusted EBITDA, and Free Cash Flow to offer clearer insights into underlying performance [Reconciliation of IFRS to Adjusted Results](index=12&type=section&id=Adjusted%20results) Haleon reconciles IFRS to Adjusted Results by excluding items like separation and restructuring costs to provide a clearer view of underlying operating profit Reconciliation to Adjusted Operating Profit | Reconciliation to Adjusted Operating Profit (£m) | 2022 | 2021 | | :--- | :--- | :--- | | **IFRS Operating Profit** | **1,825** | **1,638** | | Net amortisation and impairment of intangible assets | 172 | 16 | | Restructuring costs | 41 | 195 | | Transaction-related costs | 8 | - | | Separation and Admission costs | 411 | 278 | | Disposals and others | 15 | 45 | | **Adjusted Operating Profit** | **2,472** | **2,172** | - Adjusting items are excluded to enhance comparability and include costs related to restructuring, separation from GSK, transaction costs, and disposals[94](index=94&type=chunk)[96](index=96&type=chunk) [Organic Revenue Growth](index=14&type=section&id=Organic%20revenue%20growth) Organic revenue growth, a non-IFRS measure, excludes currency and M&A impacts, showing Haleon's underlying 9.0% growth for FY2022 Organic Revenue Growth Components | Component (%) | 2022 vs 2021 | | :--- | :--- | | Reported Revenue Growth | 13.8% | | Effect of Exchange Rates | (5.0)% | | Effect of Acquisitions/Disposals/MSAs | (0.2)% | | **Organic Revenue Growth** | **9.0%** | [Adjusted EBITDA](index=15&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA, a key non-IFRS metric, increased to £2,730m in FY2022, providing a measure of operational profitability before non-cash and adjusting items Reconciliation to Adjusted EBITDA | Reconciliation to Adjusted EBITDA (£m) | 2022 | 2021 | | :--- | :--- | :--- | | Profit After Tax | 1,119 | 1,439 | | Add: Tax, Net Interest | 706 | 214 | | **Operating Profit** | **1,825** | **1,638** | | Add: Adjusting Items | 647 | 534 | | **Adjusted Operating Profit** | **2,472** | **2,172** | | Add: D&A and Impairment | 258 | 241 | | **Adjusted EBITDA** | **2,730** | **2,413** | [Free Cash Flow](index=15&type=section&id=Free%20cash%20flow) Free cash flow, a measure of cash available for distribution or debt, was £1,579m in 2022, with a strong 141% conversion rate of reported profit after tax Free Cash Flow Components | Component (£m) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash inflow from operating activities | 2,063 | 1,356 | | Less: Net capital expenditure | (292) | (149) | | Less: Distributions to non-controlling interests | (48) | (35) | | Less: Interest paid | (163) | (15) | | Add: Interest received | 19 | 16 | | **Free cash flow** | **1,579** | **1,173** | - The free cash flow conversion rate for 2022 was **141%**, compared to **82%** in 2021[130](index=130&type=chunk)

Financial Performance - Haleon achieved strong half-year results with double-digit revenue growth and margin expansion[5] - Organic revenue growth was 116%[7, 21], with Power Brands leading at 134%[7] - Adjusted operating profit margin increased by 150 basis points to 230%[21] - Free cash flow conversion was 102%[21] - Revenue reached £5188 million, a 134% increase[23, 31] Market Share and Growth Drivers - Two-thirds of the business gained or maintained market share[5, 7] - E-commerce sales grew by high-teens percent, representing 9% of total sales[12] - Respiratory health contributed 4% to Haleon's organic revenue growth[11] Regional Performance - North America saw organic revenue growth of 104% with sales of £1873 million[26, 28] - EMEA & LATAM experienced organic revenue growth of 121% with sales of £2069 million[26, 29] - Asia Pacific achieved organic revenue growth of 123% with sales of £1246 million[26, 30] Outlook - The company anticipates organic annual revenue growth of 6-8% for the full year 2022[48]

Financial Performance - H1 2022 revenue increased by 13.4% to £5,188 million, with organic revenue growth of 11.6% driven by 3.7% price and 7.9% volume/mix [3]. - Adjusted operating profit for H1 2022 rose by 21.2% to £1,191 million, with an adjusted operating margin of 23.0%, up 90 basis points at constant currency [3][6]. - Free cash flow for H1 2022 was £553 million, achieving a free cash flow conversion rate of 102% [3]. - Group revenue for the six months ended June 30, 2022, was £5,188m, a 13.4% increase from £4,575m in 2021 [56]. - Adjusted operating profit for the same period was £1,191m, reflecting a 21.2% increase year-over-year [56]. - Profit after tax for the six months ended 30 June 2022 was £544 million, compared to £520 million for the same period in 2021, reflecting a growth of 5% [95]. - Adjusted operating profit grew by 21.2% to £1,191m, with an adjusted operating profit margin of 23.0% [60]. - The company reported a profit after taxation of £544 million for H1 2022, up from £520 million in H1 2021, indicating a positive trend in profitability [187]. Revenue Growth by Region - North America saw organic revenue growth of 10.4%, with a 24.2% adjusted operating margin, up 440bps from the previous year [55][50]. - EMEA and LatAm achieved organic revenue growth of 12.1%, with a 22.6% adjusted operating margin, down 150bps year-over-year [55][50]. - Asia-Pacific reported organic revenue growth of 12.3%, with an adjusted operating margin of 24.1%, up 140bps [55][50]. - North America revenue increased to £1,873 million in 2022, a 17.4% rise from £1,595 million in 2021 [110]. - EMEA and LatAm revenue grew to £2,069 million, reflecting an 8.7% increase from £1,903 million in 2021 [110]. - APAC revenue rose to £1,246 million, a 15.7% increase compared to £1,077 million in 2021 [110]. Product Performance - In Pain Relief, Panadol saw organic growth in the mid-twenties percent, significantly outperforming the category [25]. - Revenue growth by product category showed significant increases, with Respiratory at 50.1% and VMS at 16.2% for the six months ended June 30, 2022 [184]. - The company launched several new products targeting younger consumers, including Emergen-C Kidz, which achieved 10% market share in its first year [24][28]. Cost Management and Efficiency - The company offset approximately 40% of cost inflation through initiatives like forward buying and hedging, locking in about 90% of H2 2022 materials [34]. - The company incurred separation and admission costs of £229 million in H1 2022, compared to £105 million in H1 2021, reflecting ongoing restructuring efforts [187]. - Restructuring costs decreased significantly to £20 million in H1 2022 from £77 million in H1 2021 [126]. Cash Flow and Debt Management - Net cash from operating activities totaled £680m, significantly up from £234m in H1 2021 [66]. - Haleon had net debt of £10,707m post-demerger and aims to reduce net debt/Adjusted EBITDA to less than 3x by the end of 2024 [32]. - Net debt as of June 30, 2022, was £(8,836) million, a substantial increase from £246 million at the end of 2021, indicating a significant cash position [195]. - Cash generated from operations in H1 2022 was £818 million, significantly higher than £386 million in H1 2021 [121]. Strategic Goals and Future Outlook - FY2022 organic revenue growth is expected to be between 6-8%, with adjusted operating margin guidance slightly down from the previous year [8][9]. - The company aims for annual organic revenue growth of 4-6% and to maintain a net debt/adjusted EBITDA ratio below 3x by the end of 2024 [12][21]. - Haleon expects separation and admission costs to be approximately £0.5 billion between FY2022 and FY2024, with 80% incurred in FY2022 [11]. Sustainability Initiatives - The company is on track to achieve 100% reduction in net Scope 1 and 2 carbon emissions by 2030, and a 42% reduction in Scope 3 emissions [38]. - Haleon continues to develop all product packaging to be recyclable or reusable by 2030, with initiatives already implemented in the first half [39]. Shareholder Returns - Dividends paid to shareholders rose to £873 million, compared to £621 million in the previous year, representing an increase of 41% [96]. - The Group declared a dividend of £56 million to GSKCHHL on June 29, 2022, related to the acquisition of the India consumer healthcare business [141].