Haleon plc(HLN) - 2024 Q4 - Annual Report

Front Matter and Company Overview Filing Information This annual report for the fiscal year ending December 31, 2024, is filed under IFRS by Haleon plc, a large accelerated filer - The report is an annual filing (Form 20-F) for the fiscal year ended December 31, 2024[3] - Haleon plc is classified as a large accelerated filer and a well-known seasoned issuer[6][10] - The financial statements are prepared using International Financial Reporting Standards (IFRS) as issued by the IASB[11] Haleon at a Glance Haleon is a global consumer health leader targeting 4-6% annual organic revenue growth and a net debt/EBITDA ratio of ~2.5x - Haleon's purpose is to deliver better everyday health with humanity[17] - The company has leadership positions in five global categories: Oral Health, VMS, Pain Relief, Respiratory Health, and Digestive Health and Other[18] Medium-Term Financial Guidance | Metric | Guidance | | :--- | :--- | | Annual organic revenue growth | 4-6% | | Organic operating profit growth | Ahead of organic revenue growth | | Net debt/adjusted EBITDA | Expected to be around 2.5x | | Dividend | To grow at least in line with adjusted earnings | Strategic Report 2024 Highlights Haleon achieved 5% organic revenue growth and strong cash flow in 2024, returning over £1 billion to shareholders while advancing strategic goals Key Financial Highlights 2024 | Metric | 2024 Value | 2023 Value | | :--- | :--- | :--- | | Revenue | £11.2bn | £11.3bn | | Operating Profit | £2.2bn | £2.0bn | | Operating Profit Margin | 19.6% | 17.7% | | Organic Revenue Growth | 5.0% | 8.0% | | Organic Operating Profit Growth | 9.8% | 10.8% | | Free Cash Flow | £1.9bn | £1.6bn | | Net Debt/Adjusted EBITDA | 2.8x | 3.0x | 2024 Revenue Breakdown | Breakdown | Category/Region | Revenue | Percentage | | :--- | :--- | :--- | :--- | | By Geography | North America | £4.0bn | 36% | | | EMEA & LatAm | £4.6bn | 41% | | | APAC | £2.6bn | 23% | | By Market Category | Oral Health | £3.3bn | 29% | | | VMS | £1.7bn | 15% | | | Pain Relief | £2.6bn | 23% | | | Respiratory Health | £1.7bn | 15% | | | Digestive Health and Other | £1.9bn | 18% | - The company returned over £1 billion to shareholders in 2024 through its first share buyback program and dividend payments[36] - Achieved its health inclusivity ambition to empower 50 million people a year, one year ahead of the 2025 plan[39] Chair's Statement The Chair highlighted strong progress, disciplined capital allocation, and a proposed 10% dividend increase to 6.6p per share - The company executed disciplined capital allocation, including the disposal of ChapStick and non-US Nicotine Replacement Therapy for c.£0.8 billion and investing £0.5 billion to increase its stake in the China OTC joint venture to 88%[44] - Over £1 billion was returned to shareholders through the first share buyback program and dividend payments, with a further £500 million allocated for share buybacks in 2025[45] - The Board proposes a total dividend of 6.6p per ordinary share, a 10% increase, representing a payout ratio of approximately 37% of 2024 adjusted earnings[46] - New board members were appointed to add global FMCG, financial, and digital technology experience, including Dawn Allen as CFO[51] Chief Executive Officer's Review The CEO reported strong operational momentum, with 5% organic revenue growth and £1.9 billion in free cash flow enabling deleveraging 2024 Financial Performance Summary | Metric | Growth Rate | | :--- | :--- | | Organic Revenue Growth | 5.0% | | Reported Revenue Growth | (0.6)% | | Organic Operating Profit Growth | 9.8% | | Reported Operating Profit Growth | 10.5% | - Achieved strong free cash flow of £1.9 billion, allowing for debt reduction to 2.8x net debt/adjusted EBITDA[60] - 71% of brands gained or maintained market share, supported by innovations like Sensodyne Clinical White[67] - The outlook for 2025 includes expected organic revenue growth of 4-6% and organic operating profit growth ahead of revenue[65] Our Business Environment Haleon operates in a growing c.£200 billion consumer health market, driven by an aging population and a consumer shift to self-care - Haleon operates in a fast-growing, c.£200 billion global consumer health market[68] Global Market Share Position (2023) | Category | Haleon's Market Share | Haleon's Rank | | :--- | :--- | :--- | | Oral Health (Therapeutic) | ~11% (c.45% in Therapeutic) | 3 (1 in Therapeutic) | | VMS | ~3% | 1 | | Pain Relief | ~13% | 1 | | Respiratory Health | 5.6% | Joint 1 | | Digestive Health | 4.2% | 4 | - Major long-term growth drivers include a growing and aging population, an expanding middle class in emerging markets, a consumer shift towards self-care, and pressure on public healthcare systems[77][78] Our Business Model The business model leverages human understanding and trusted science to drive a sustainable growth cycle of revenue, profit, and cash conversion - The business model's competitive advantage stems from combining deep human understanding with trusted science[81] - The company engages with over 3.5 million Health Professionals who recommend its products, driving new user acquisition[85] - In 2024, Haleon returned over £1 billion to shareholders through share buybacks and dividends and invested c.£0.5 billion to increase its equity in its China joint venture, TSKF[92] Our Key Stakeholders Haleon engages seven key stakeholder groups, using insights from these interactions to inform strategic decisions and measure outcomes - Haleon engages with seven key stakeholder groups: Consumers, Customers, Employees, Governments, Health Professionals, Investors, and Suppliers[100] Stakeholder Engagement Examples and Outcomes (2024) | Stakeholder | Engagement Example | Outcome Example | | :--- | :--- | :--- | | Consumers | Handled c.1.3m consumer enquiries | Consumer satisfaction (CSAT) improved 16 points | | Employees | Annual engagement survey | Employee engagement score of 81% | | Health Professionals | Haleon Health Partner portal | Reached nearly 1m health professional registrations | | Suppliers | Innovation events | Over 600 suppliers attended innovation events | Our Strategy The company's strategy focuses on increasing household penetration, capitalizing on new opportunities, and maintaining financial discipline - The strategy is based on four pillars: 1) Increase household penetration, 2) Capitalise on new and emerging opportunities, 3) Maintain strong execution and financial discipline, and 4) Run a responsible business[102][107] - A key growth driver is increasing household penetration by innovating to address unmet consumer needs[103] - The company aims to expand its portfolio by pursuing Rx-to-OTC switches and entering new consumer trend areas[104][107] - Running a responsible business is integral to the strategy, with goals focused on ESG, including health inclusivity and environmental protection[106] Our Market Categories Haleon drives growth across five key categories through innovation, emerging market expansion, and healthcare professional engagement Oral Health The Oral Health category, a global leader in therapeutic care, generated £3.3 billion in revenue driven by innovation and emerging market expansion Oral Health Performance | Metric | Value | | :--- | :--- | | 2024 Revenue | £3.3bn | | Global Market Share (2023) | 11% | - Successfully launched Sensodyne Clinical White, which ranked as the 1 innovation in the US Oral Health category and drove market share growth[112] - Expanded into emerging markets with affordable products, such as the Sensodyne 20 rupee pack in India and the launch of parodontax in China[112] Vitamins, Minerals and Supplements (VMS) The VMS category, a market leader, generated £1.7 billion in revenue by increasing penetration with tailored and affordable products VMS Performance | Metric | Value | | :--- | :--- | | 2024 Revenue | £1.7bn | | Global Market Share (2023) | 2.8% | - Expanded the Centrum range in Brazil with affordable single-dose sachets, introducing new consumers to the VMS category[117] - Launched Emergen-C Crystals Immune+ and zero-sugar formulas in the US, contributing to category share growth[117] Pain Relief The market-leading Pain Relief category generated £2.6 billion in revenue, supported by new topical product launches and professional engagement Pain Relief Performance | Metric | Value | | :--- | :--- | | 2024 Revenue | £2.6bn | | Global Market Share (2023) | 13% | - Launched Advil Targeted Relief in the US, the first topical pain relief product from the Advil brand[121] - Engaged approximately 42,000 Health Professionals during the 4th Global Pain Awareness Week[121] Respiratory Health The Respiratory Health category, a joint market leader, generated £1.7 billion in revenue through product roll-outs and sustainability initiatives Respiratory Health Performance | Metric | Value | | :--- | :--- | | 2024 Revenue | £1.7bn | | Global Market Share (2023) | 5.6% | - Continued the successful roll-out of Otrivin Nasal Mist across Europe, driving share growth in launch markets[126] - Began rolling out new, easy-to-open, more recyclable paper packaging for Flonase, aiming to avoid over 160 tonnes of plastic waste per year[126] Digestive Health and Other This category generated £1.9 billion in revenue, highlighted by the strategic US launch of Eroxon and the divestment of its non-US Smokers' Health business Digestive Health and Other Performance | Metric | Value | | :--- | :--- | | 2024 Revenue | £1.9bn | | Global Market Share (2023) | 4.2% | - Launched Eroxon in the US, the first OTC, FDA-cleared treatment for erectile dysfunction[131] - Divested the Smokers' Health business outside of the US to focus resources on higher growth brands[130] Our Culture and People Haleon fosters a purpose-led culture, achieving an 81% employee engagement score and maintaining strong health, safety, and ethical standards - Achieved an 81% overall employee engagement score in 2024, an increase of 3% from 2023[63][142] Company Gender Representation (as at 31 Dec 2024) | Level | Men | Women | Total | | :--- | :--- | :--- | :--- | | Directors | 5 | 6 | 11 | | Executive Team | 7 | 6 | 13 | | Senior managers | 773 | 653 | 1,434 | | All employees | 12,996 | 11,431 | 24,561 | Health and Safety Performance | Metric (per 100,000 hours worked) | 2024 | 2023 | | :--- | :--- | :--- | | Reportable Injury and Illness Rate | 0.13 | 0.14 | | Lost time injury and illness rate | 0.10 | 0.10 | - The company maintains a robust cyber security function, which provides frequent updates to the Executive Team and Audit & Risk Committee, with no significant cyber-security incidents identified in 2024[170] Our Approach to Sustainability The sustainability strategy focuses on health inclusivity, environmental impact, and ethics, achieving key carbon and social targets ahead of schedule Sustainability Performance vs. Targets | Aim | 2024 Performance | Target | | :--- | :--- | :--- | | People empowered (Health Inclusivity) | 50m+ | 50m by 2025 | | Net Scope 1 & 2 carbon reduction (vs 2020) | -50% | -100% by 2030 | | Scope 3 carbon reduction (vs 2022) | -10% | -42% by 2030 | | Virgin petroleum-based plastic reduction (vs 2022) | -1% | -10% by 2025 | | Recycle-ready packaging | 74% | Develop solutions for all by 2025 | - Empowered over 50 million people in 2024, achieving the 2025 health inclusivity target one year ahead of plan[183] - Achieved a 50% net reduction in market-based Scope 1 and 2 carbon emissions versus the 2020 baseline[174] Task Force on Climate-related Financial Disclosures (TCFD) Haleon's TCFD report outlines its governance and strategy for climate risks, identifying flooding and carbon pricing as key long-term challenges - The Board has overall accountability for climate-related risks and opportunities, with oversight delegated to the Environmental & Social Sustainability (ESS) and Audit & Risk Committees[192][194] - Physical risk analysis identified riverine/flash flooding and heatwaves as the greatest long-term threats to key sites in Puerto Rico, China, and Ireland[217] - Transition risk analysis shows that under a 1.5°C scenario, carbon pricing could pose a medium financial risk if emissions targets are not met, with Scope 3 emissions being the largest exposure[238] - Changing consumer preferences for sustainable products represent both a medium risk and a significant opportunity, potentially adding 2.6% to revenue in 2032 under a 1.5°C scenario[242][252] Our Key Performance Indicators (KPIs) Haleon tracks strategic progress via KPIs, reporting 5% organic revenue growth, strong cash flow, and improved market share in 2024 2024 Key Performance Indicators | KPI | 2024 Result | 2023 Result | | :--- | :--- | :--- | | Organic revenue growth | 5.0% | 8.0% | | Organic operating profit growth | 9.8% | 10.8% | | Free cash flow | £1.9bn | £1.6bn | | Adjusted diluted EPS growth | 3.5% | -6.0% | | Net debt/adjusted EBITDA | 2.8x | 3.0x | | Business gained/maintained share | 71% | 58% | | Carbon reduction (Scope 1 & 2 vs 2020) | -50% | -48% | | Virgin petroleum-based plastic reduction (vs 2022) | -1% | +3% | | Employee engagement | 81% | 78% | - Executive remuneration is linked to KPIs through the Annual Incentive Plan and Performance Share Plan[282][284][287] 2024 Business Review The 2024 business review highlights strong financial performance, active portfolio management, and significant debt reduction and shareholder returns 2024 Financial Summary | Metric | 2024 (£m) | 2023 (£m) | % Change (Reported) | | :--- | :--- | :--- | :--- | | Revenue | 11,233 | 11,302 | (0.6)% | | Operating profit | 2,206 | 1,996 | 10.5% | | Adjusted operating profit | 2,500 | 2,549 | (1.9)% | | Profit after tax (attributable to shareholders) | 1,442 | 1,049 | 37.5% | | Diluted EPS (pence) | 15.7 | 11.3 | 38.9% | | Adjusted diluted EPS (pence) | 17.9 | 17.3 | 3.5% | - Organic revenue grew 5.0%, driven by a combination of price (+3.7%) and volume/mix (+1.3%)[291][315] - The company divested ChapStick and the non-US Nicotine Replacement Therapy business, raising proceeds of £0.8 billion[290] - Net debt was reduced by £607 million to £7.9 billion, with leverage at 2.8x net debt to adjusted EBITDA[296][297] Geographical Segment Performance Haleon achieved broad-based organic growth, with EMEA & LatAm leading at 7.9%, followed by APAC at 6.0% and North America at 1.1% 2024 Organic Revenue Growth by Geography | Region | Organic Revenue Growth | Price Component | Volume/Mix Component | | :--- | :--- | :--- | :--- | | North America | 1.1% | 2.3% | (1.2)% | | EMEA & LatAm | 7.9% | 5.9% | 2.0% | | APAC | 6.0% | 1.9% | 4.1% | | Group Total | 5.0% | 3.7% | 1.3% | 2024 Organic Operating Profit Growth by Geography | Region | Organic Operating Profit Growth | | :--- | :--- | | North America | (2.1)% | | EMEA & LatAm | 20.2% | | APAC | 12.6% | | Group Total | 9.8% | Revenue by Market Category Oral Health and VMS led organic growth at 9.6% and 7.6% respectively, while Pain and Respiratory Health performance was muted 2024 Revenue by Market Category | Market Category | Revenue (£m) | Organic Growth (%) | | :--- | :--- | :--- | | Oral Health | 3,312 | 9.6% | | VMS | 1,696 | 7.6% | | Pain Relief | 2,564 | 0.1% | | Respiratory Health | 1,677 | 0.9% | | Digestive Health and Other | 1,984 | 5.5% | - Oral Health growth was supported by the continued roll-out of Sensodyne Clinical White, which was the number one US Oral Health market launch in 2024[335] - Respiratory Health growth was muted due to lapping strong 2023 comparatives and a softer cold and flu season in H2 2024, particularly in the US[349] Indebtedness, Liquidity and Financial Risk Management Haleon reduced its net debt to £7.9 billion, achieving a 2.8x leverage ratio while maintaining a strong liquidity position of £4.1 billion Debt and Leverage | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Borrowings | £10,127m | £9,456m | | Net Debt | £7,907m | £8,514m | | Net Debt / Adjusted EBITDA | 2.8x | 3.0x | - The Group has total liquidity of £4.1 billion, including £2.25 billion in cash and £1.9 billion in undrawn credit facilities[357] - The currency mix of net debt is primarily USD (56%) and EUR (25%), aligning with the currency mix of earnings to manage foreign exchange risk[361][362] Use of Non-IFRS Measures Haleon uses non-IFRS measures like 'Adjusted Results' and 'Organic Growth' to provide a clearer view of underlying business performance - Adjusted results exclude items such as net amortisation and impairment of intangible assets, restructuring costs, transaction-related costs, separation costs, and disposals[365][367] - Organic growth measures further exclude the impact of divestments, acquisitions, and foreign currency exchange movements to allow for a year-on-year comparison of underlying performance[378][379] Reconciliation of IFRS to Adjusted Operating Profit (2024) | Item | Amount (£m) | | :--- | :--- | | IFRS Operating Profit | 2,206 | | Net amortisation and impairment of intangible assets | 147 | | Restructuring costs | 214 | | Transaction-related costs | (1) | | Separation and admission costs | 30 | | Disposals and others | (96) | | Adjusted Operating Profit | 2,500 | Our Approach to Risk Haleon employs a comprehensive risk framework to manage principal risks including growth targets, supply chain, ESG, and cyber security - The Board has ultimate accountability for risk management and defining risk appetite, with oversight delegated to the Audit & Risk Committee (ARC)[410][412] - Principal risks include: failure to meet growth objectives, inability to attract and retain talent, supply chain resilience, trusted ingredients, environmental, social and governance (ESG) risks, cyber security, and geopolitical instability[419][422][423][427][430][431][434] - The risk of cyber security threats has increased due to a rise in global incidents, supplier exposure, and the adoption of AI tools[431] - Artificial Intelligence (AI) is identified as an emerging risk, presenting both opportunities for performance and risks related to governance, data privacy, and security[436] Viability Statement The Directors confirm the Group's viability over a three-year period, supported by stress testing against severe but plausible risk scenarios - The Directors assessed the company's viability over a three-year period, concluding they have a reasonable expectation that the Group can meet its liabilities as they fall due[439][443] - Stress testing was performed against severe but plausible scenarios, including a major manufacturing site shutdown, inability to access capital markets, and a significant product recall[441][444] - The Group has available mitigating actions to withstand the impact of severe risk scenarios, such as reducing A&P spend, cutting capital expenditure, and pausing M&A[442] Corporate Governance Our Board of Directors and Executive Team Haleon's Board comprises 11 members with strong gender diversity and a broad range of consumer, international, and financial skills Board Composition (as of 6 March 2025) | Role | Count | | :--- | :--- | | Chair | 1 | | Executive Directors | 2 | | Independent Non-Executive Directors | 8 | | Total | 11 | - The Board demonstrates strong gender diversity, with 6 women and 5 men[451] - Key skills and experience on the Board include Consumer and Retail (10 directors), International (10 directors), and Finance (8 directors)[453] - Dawn Allen was appointed Chief Financial Officer on November 1, 2024, bringing extensive global FMCG and finance experience[456] Letter from the Chair (Governance) The Chair's letter details the Board's focus on strategy, capital allocation, and succession planning, including a £500 million share buyback - The Board visited China to better understand the market, resulting in a decision to increase Haleon's interest in its China JV from 55% to 88%[488] - After deleveraging from c.4x to c.2.8x net debt/adjusted EBITDA since demerger, the company commenced a £500 million share buyback program in 2024[491] - The company undertook its first external Board evaluation, conducted by Christopher Saul Associates Limited[497] - Key succession activities included appointing Dawn Allen as the new CFO and welcoming Alan Stewart and Nancy Avila as new independent Non-Executive Directors[494][496] Governance Structure and Board Activities Haleon's governance framework ensures clear accountability, with the Board and its four committees overseeing strategy, risk, and performance - The Board's governance structure includes four primary committees: Audit & Risk, Environmental & Social Sustainability, Nominations & Governance, and Remuneration[500][502] - Key Board decisions in 2024 included approving the increase in the TSKF joint venture stake in China to 88% and approving a £500 million allocation for share buybacks[508] - The Board conducted its first external performance review, which concluded that the Board and its committees operate effectively[539][541] - Workforce engagement is managed through a designated Non-Executive Director, Dame Vivienne Cox, who held five sessions with employees in 2024 and reported findings to the Board[545][550] Audit & Risk Committee Report The committee maintained rigorous oversight of financial reporting and internal controls, including SOX compliance and brand impairment testing - The committee's key responsibilities include overseeing financial reporting integrity, the audit process, internal controls, and risk management systems[556][561] - A significant reporting matter considered was the recoverable amount of indefinite life brands, leading to a £135 million non-cash impairment charge for the Nexium brand[567] - The committee maintained close oversight of SOX Section 404 compliance and concluded that internal control over financial reporting was effective as of December 31, 2024[581] - The total fees paid to the external auditor, KPMG, for the year ended December 31, 2024, were £19 million, of which £2 million was for non-audit work[592] Environmental & Social Sustainability Committee Report The ESS Committee oversaw significant progress in sustainability, focusing on health inclusivity, carbon reduction, and sustainable packaging - The committee's responsibilities include overseeing progress against the ESS agenda, emerging ESS issues, stakeholder engagement, and external ESS reporting[604] - Conducted deep dives on key topics including health inclusivity, sustainable packaging, carbon reduction (SBTi), and nature-related disclosures (TNFD)[606] - Oversaw the publication of Haleon's first Responsible Business Report and Climate Action Transition Plan, and monitored readiness for CSRD[606][616] - Reviewed and confirmed the virgin petroleum-based plastic reduction target of 10% by 2025 and the goal for all product packaging to be recycle-ready by 2025[609] Nominations & Governance Committee Report The committee focused on Board succession, appointing a new CFO and three Non-Executive Directors to enhance financial and digital skills - Led the appointment of Dawn Allen as CFO and three new Independent Non-Executive Directors: Alan Stewart, Nancy Avila, and Bláthnaid Bergin[621] - The Board appointment process identified needs for enhanced digital/technical expertise and a successor for the Audit & Risk Committee Chair[633][641] - As of March 2025, the Board met the FTSE Women Leaders Review recommendations and the Parker Review objective for ethnic minority representation[647] Board Diversity Statistics (as of 6 March 2025) | Category | Board Members | % of Board | | :--- | :--- | :--- | | Gender | | | | Men | 4 | 36% | | Women | 7 | 64% | | Ethnicity | | | | White | 8 | 73% | | Asian/Asian British | 2 | 18% | | Mixed/Multiple Ethnic Groups | 1 | 9% | Directors' Remuneration Report The report outlines how pay is aligned with performance, with the 2024 AIP paying out at 58.2% and the 2022-24 PSP vesting at 76% - The 2024 Annual Incentive Plan (AIP) outcome was 58.2% of maximum for the CEO, based on financial performance and individual objectives[655][674] - The 2022-2024 Performance Share Plan (PSP) awards will vest at 76% of maximum, after the Committee applied downward discretion of c.9 percentage points[656][675] - For 2025, the AIP financial metric weightings will be rebalanced to 40% organic revenue growth and 40% organic operating profit growth[658][663] - Executive Director salaries will increase by 3.5% for 2025, in line with the average increase for the UK workforce[661] Annual Report on Remuneration This section details 2024 remuneration outcomes, including a total of £9.1 million for the CEO and specific AIP and PSP vesting results 2024 'Single Figure' of Remuneration (£'000) | Executive Director | Salary | Benefits | Pension | AIP | PSP | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Brian McNamara (CEO) | 1,292 | 122 | 90 | 1,520 | 6,038 | - | 9,062 | | Tobias Hestler (Outgoing CFO) | 604 | 34 | 42 | 701 | - | - | 1,381 | | Dawn Allen (Incoming CFO) | 133 | 15 | 9 | 150 | - | 2,127 | 2,434 | 2024 AIP Performance vs. Targets | Performance Measure | Weighting | Target | Actual | Outcome (% of max) | | :--- | :--- | :--- | :--- | :--- | | Organic revenue growth | 60% | 5.3% | 5.0% | 47% | | Organic operating profit growth | 20% | 7.5% | 9.8% | 78.8% | 2022-2024 PSP Performance vs. Targets | Performance Measure | Weighting | Maximum Target | Actual Outcome | Vesting Level | | :--- | :--- | :--- | :--- | :--- | | Cumulative free cash flow | 50% | £5.557bn | £5.318bn | 82% | | Net debt/adjusted EBITDA | 50% | 2.4x | 2.6x | 88% | | Overall Vesting (after discretion) | 100% | | | 76% | Consolidated Financial Statements Report of Independent Registered Public Accounting Firm KPMG issued an unqualified opinion on the financial statements and internal controls, identifying the Preparation-H asset valuation as a critical audit matter - The auditor, KPMG LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting[794] - The identified critical audit matter was the 'Assessment of the recoverable amount for the Preparation H intangible asset' due to the subjective and complex judgments involved[802][803] Consolidated Financial Statements Tables This section presents the core IFRS-compliant consolidated financial statements for Haleon plc for the year ended December 31, 2024 Consolidated Income Statement Summary (Year ended 31 December) | (£m) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Revenue | 11,233 | 11,302 | 10,858 | | Gross profit | 6,824 | 6,747 | 6,577 | | Operating profit | 2,206 | 1,996 | 1,825 | | Profit before tax | 1,910 | 1,628 | 1,618 | | Profit after tax for the year | 1,475 | 1,111 | 1,119 | | Profit attributable to shareholders | 1,442 | 1,049 | 1,060 | Consolidated Balance Sheet Summary (as at 31 December) | (£m) | 2024 | 2023 | | :--- | :--- | :--- | | Total non-current assets | 28,597 | 29,237 | | Total current assets | 5,718 | 4,818 | | Total assets | 34,315 | 34,055 | | Total current liabilities | (5,812) | (4,640) | | Total non-current liabilities | (12,279) | (12,686) | | Total liabilities | (18,091) | (17,326) | | Net assets | 16,224 | 16,729 | | Total equity | 16,224 | 16,729 | Consolidated Cash Flow Statement Summary (Year ended 31 December) | (£m) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net cash inflow from operating activities | 2,301 | 2,100 | 2,063 | | Net cash inflow/(outflow) from investing activities | 528 | (134) | (8,784) | | Net cash (outflow)/inflow from financing activities | (1,537) | (1,568) | 6,911 | | Increase in cash and cash equivalents | 1,292 | 398 | 190 | Notes to the Consolidated Financial Statements The notes detail accounting policies and figures, covering segment performance, intangible assets, financial risks, and legal contingencies - The financial statements are prepared on a going concern basis, with the Directors confident the Group can meet its requirements for at least 12 months[826] - A non-cash impairment charge of £135 million was recorded for the Nexium brand due to challenging market conditions[963][964] - The Group is not a party to any Zantac claims and has rejected indemnification requests from GSK and Pfizer[1046][1047] - On December 27, 2024, Haleon increased its equity interest in its China OTC joint venture (TSKF) to 88% for a consideration of £486 million[1163][1164] Other Information Directors' Report This report provides statutory information on share capital, dividends, significant shareholders, and energy and carbon reporting - The company purchased a total of 181,212,949 ordinary shares in 2024, utilizing both on-market and off-market buyback authorities[1206] Significant Shareholders (as of latest disclosure) | Shareholder | % of Issued Share Capital | | :--- | :--- | | Blackrock, Inc. | 5.22% | | Pfizer, Inc. | 7.31% | | Wellington Management Group LLP | 5.10% | 2024 Streamlined Energy and Carbon Reporting (Global) | Metric | Value | | :--- | :--- | | Total Scope 1 & 2 GHG emissions (location-based) | 192,000 tonnes CO2e | | Total net Scope 1 & 2 carbon emissions (market-based) | 48,000 tonnes CO2e | | Total energy consumed | 719 GWh | Group Information This section details Haleon's history, key assets, internal controls, risk factors, and material contracts like the Pfizer SAPA - Haleon was formed through the combination of the consumer healthcare businesses of GSK, Novartis (2015), and Pfizer (2019), followed by a demerger from GSK in July 2022[1246][1247] - Management has assessed the effectiveness of internal control over financial reporting as of December 31, 2024 and concluded it is effective[1265] - Key risk factors include operating in a highly competitive market, supply chain disruptions, dependence on key retail customers, and the ability to develop and commercialize new products effectively[1268][1273][1280][1284] - The Pfizer Stock and Asset Purchase Agreement (SAPA) contains cross-indemnities, under which GSK and Pfizer have sought indemnification for OTC Zantac claims, which the Group has rejected[1353] Shareholder Information This section outlines key shareholder data, including differences in governance vs NYSE standards, dividend history, and tax guidance - Significant differences between Haleon's UK governance and NYSE standards exist in the definition of director independence and the composition of board committees[1417][1418][1419] Dividend History (per ordinary share) | Year | Dividend (pence) | | :--- | :--- | | 2024 (proposed) | 6.6 | | 2023 | 6.0 | | 2022 | 2.4 | - As of December 31, 2024, institutional and corporate holders owned 69.62% of shares, while individuals and other bodies held 12.15%[1426]