Haleon plc(US:HLN)2022-09-20 16:00Financial 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].