Haleon plc(HLN) - 2022 Q4 - Annual Report

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]