Haleon (NYSE:HLN) H2 2025 Earnings call February 25, 2026 02:00 AM ET Company ParticipantsBrian McNamara - CEO and Executive DirectorDawn Allen - CFO and Executive DirectorBrian McNamaraHello, and welcome to our full year results presentation. 2025 was an important year for Haleon, and we made good progress against our three strategic priorities. First, delivering competitive growth in a challenging environment. Second, unlocking productivity gains. Third, embedding an agile, performance-focused culture. In ...

Financial Data and Key Metrics Changes - The company achieved 3.4% organic revenue growth in Q3, with a balance of 1.8% from price and 1.6% from volume mix [3][6] - Reported revenue grew 0.7% in Q3, impacted by a 2.3% drag from divestments and 0.4% from foreign exchange [6][7] - The company is on track to deliver its full-year guidance, expecting organic revenue growth of around 3.5% for 2025 [15][16] Business Line Data and Key Metrics Changes - Oral health grew 6.9% in Q3, driven by innovation-led premiumization and geographic expansion [7][8] - The business line for pain relief grew 3.7%, with Panadol showing high single-digit growth [8][9] - Respiratory health declined 1.8%, influenced by the previous year's elevated COVID cases [9][10] - Digestive health grew 2.1%, supported by innovations like TUMS Gummy Bites Plus [9][10] Market Data and Key Metrics Changes - North America delivered organic revenue growth of 0.4%, driven by 0.7% price increase, while volume mix decreased by 0.3% [10][12] - EMEA and LATAM saw organic revenue increase of 5.3%, with price at 3.5% and volume mix at 1.8% [12][13] - Asia-Pacific experienced organic revenue growth of 5.1%, with strong performance in India and Southeast Asia [13][14] Company Strategy and Development Direction - The company focuses on innovation-led premiumization to drive category growth and expand market reach [4][6] - Continued investment in supply chain productivity and cost discipline is emphasized to enhance flexibility and agility in P&L [5][6] - The company aims to strengthen its innovation pipeline and improve net revenue management in North America [11][22] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging consumer backdrop in North America but highlighted outperformance in oral health and digestive health [3][10] - The company expects continued strong growth in Q4, driven by salesforce investment and an improving macro environment [14][15] - Management remains confident in returning to growth in North America next year, with actions in place to address inventory levels [22][66] Other Important Information - The company completed EUR 500 million in share buybacks for 2025 [6] - Significant progress has been made in reducing SKUs by 19%, improving gross margin and working capital [5][80] Q&A Session Summary Question: North America performance and future expectations - Management explained that the sequential improvement in North America was driven by reduced drag from smokers' health and better performance in oral and digestive health [20][21] - Guidance for Q4 suggests around 1% decline, reflecting tough comparatives from the prior year [21][22] Question: Innovation pipeline and cold/flu season outlook - Management confirmed a strong innovation pipeline across categories and noted that the cold and flu season's variability impacts guidance [28][30] Question: Channel dynamics and inventory management - Management discussed the differences in inventory levels across channels, with a focus on ensuring appropriate stock levels for growth next year [35][66] Question: Consumer behavior and market performance - Management highlighted a bifurcated consumer environment, with varying performance across categories and channels [41][42] Question: Oral care business performance - Management acknowledged softer performance in certain oral care brands but remains positive about overall oral health growth [70][72]

Performance Overview - Alluvial Fund achieved a return of 15.5% in Q3 2025, with a total return of 33.6% year-to-date, outperforming benchmark indexes [3][8] - This performance marks the third-best quarterly result in the fund's nine-year history [3] Portfolio Highlights - The largest position in the portfolio is Zegona Communications, which is undergoing significant asset sales that will enhance cash flow and reduce leverage [11][12] - FitLife Brands acquired Irwin Naturals out of bankruptcy for $42.5 million, funded by cash and bank debt, and is expected to perform well due to strong leadership [15][16] - PHI Group, a helicopter operator, is noted for its profitability and potential for a sale or public listing, trading at half the value of peers [29] Market Insights - Concerns are raised about the sustainability of the current market rally, particularly regarding speculative companies like Rigetti Computing, which has a market value of $18 billion despite minimal revenue [9][10] - The fund maintains a cautious approach, focusing on companies with durable cash flows and valuable assets [10] Sector and Geographic Allocation - The fund's geographic allocation is primarily in the United States (59.1%), followed by the United Kingdom (23.2%) and Eurozone (10.1%) [23] - Sector allocation includes Communications (21.0%), Consumer Staples (20.7%), and Real Estate (12.9%) [24] Notable Developments - NewPrinces Group plans to list a minority stake in UK food producer Princes, potentially realizing significant value from its investment [19] - Unidata SpA, an Italian broadband provider, has seen cash flow grow by 67% since 2022, yet its shares are down nearly 40%, indicating a potential undervaluation [25] Risk Management - The fund is trimming its position in Zegona for risk control, emphasizing the importance of managing exposure to unforeseen negative events [14] - The fund's allocation to Expert Markets securities is limited to 10% to manage liquidity risk [28]