Haleon (HLN) FY 2025 Conference September 02, 2025 11:15 AM ET Company ParticipantsNone - ExecutiveBrian McNamara - CEO & Executive DirectorNoneThe guide was already second half weighted.Brian McNamaraYeah.NoneEven with the lowered guide, you still assumed a step up in the second half. I just want to underpin your confidence that the 3.5% is the absolute minimum you'll deliver. Could it still actually get closer to 4% if you have a good cough cold season? There was no season virtually last year. Just on tha ...

Financial Data and Key Metrics Changes - The company has adjusted its sales growth guidance to around 3.5%, while profit guidance has been raised to high single digits on an organic basis, driven by a strong productivity program [4][5][6] - In the first half of the year, the company achieved a growth rate of 3.2% [4] - Gross margin increased by 160 basis points in the first half of the year [55] Business Line Data and Key Metrics Changes - The U.S. market showed a slight decline, with consumption up by approximately half a point in Q3, while the overall market was down by half a point [4][5] - The company experienced mid-single-digit growth in EMEA, LATAM, and Asia-Pacific regions, with expectations for acceleration in these areas [6] - Oral health performance continued to grow, with a consistent growth rate around 3% [17] Market Data and Key Metrics Changes - The U.S. market faced muted overall growth and continued inventory pressure, leading to a cautious outlook for the remainder of the year [5][6] - The company noted that the cold and flu season significantly impacted consumption dynamics, with a high season in Q1 followed by a lower allergy season in Q2 [15][16] Company Strategy and Development Direction - The company aims to reach a billion more consumers, particularly focusing on low-income consumers in emerging markets [10] - There is a strong emphasis on managing inventory proactively with retailers to avoid out-of-stock situations [5][13] - The company is optimistic about the potential of its brands in emerging markets, particularly in India and China, where it has launched products tailored for low-income consumers [33][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 3.5% growth target, despite challenges in the U.S. market [6][63] - The company is focused on maximizing portfolio performance and improving market share, particularly in oral health and therapeutic categories [26][27] - Management acknowledged the cyclical nature of the market and expressed optimism about returning to growth in the U.S. [63] Other Important Information - The company is implementing a productivity program expected to deliver £800 million in savings by 2030, with a target of 50 to 80 basis points of gross margin improvement annually [52][55] - The company is focused on capital allocation towards automation and building additional plants in strategic locations [60][61] Q&A Session Summary Question: What is the company's outlook on cash flow and working capital? - Management acknowledged the importance of cash flow and indicated that improvements in inventory reduction and working capital could fund capital investments [69][79] Question: How is the company addressing the challenges in the U.S. market? - Management noted that the U.S. market has been challenging but expressed confidence in the potential for recovery and growth [63][80] Question: What is the vision for the new therapeutic skin health category? - Management indicated that the decision to break out therapeutic skin health as a new category was strategic and aimed at capturing growth opportunities [74]

Financial Data and Key Metrics Changes - The company reported a decline in organic sales growth in North America of nearly 2% in Q2, contrasting with growth in EMEA, LatAm, and APAC, which were within the medium-term guidance of 4% to 6% [3][5][14] - Gross margin improved by 160 basis points, contributing to strong cash flow and organic profit growth [5][15] - A&P (Advertising and Promotion) spending increased by 6.8% to 20.8% in the first half of the year, reflecting a focus on growth drivers [16][19] Business Line Data and Key Metrics Changes - In North America, consumption grew slightly ahead of the market, with a 0.5% increase compared to a market decline of 0.5% [9][10] - Oral health and digestive health brands showed strong growth, with market share gains in brands like Tons and Benefiber [9][10] - Centrum experienced mid-single-digit growth outside the US but saw declines in the US, while Emergency brand continued to perform well [11][12] Market Data and Key Metrics Changes - The US market is facing challenges with low consumer confidence and inventory pressures, impacting overall performance [6][8][14] - EMEA and APAC regions showed positive trends, with volume growth accelerating in Q2 [47][51] - Central Europe reported high single-digit growth, while Western Europe experienced mid-single-digit growth, driven by strong performance in oral health [53][54] Company Strategy and Development Direction - The company remains committed to its medium-term guidance of 4% to 6% organic sales growth despite current challenges in the US market [49][56] - Focus on innovation and premiumization, particularly in key markets like India and Brazil, is part of the strategic plan [39][40] - The company aims to close the incidence treatment gap and expand reach to lower-income consumers while maintaining investment in A&P and R&D [16][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging consumer environment in the US, with expectations of continued inventory pressure and no significant improvement anticipated in the near term [14][22] - Confidence in the medium-term outlook remains strong, with expectations for improved performance in 2026 [49][56] - The company is actively managing its portfolio and focusing on driving market growth despite external challenges [36][41] Other Important Information - The nicotine replacement therapy (NRT) business is a significant part of the portfolio, with a complex ownership structure affecting innovation and growth [73][75] - The company expects a high single-digit growth in operating profit, supported by gross margin improvements and effective cost control [77][78] Q&A Session Summary Question: North America's performance and future growth expectations - Management noted that North America faced challenges due to a difficult consumer environment and inventory pressures, with expectations for a gradual return to growth [3][22][25] Question: A&P spending and areas of reinvestment - A&P spending increased significantly, with a focus on driving growth in key markets and improving ROI [16][19] Question: Share performance and competitive pressures - The decline in the percentage of business gaining or maintaining share was attributed to challenges with brands like Advil and Centrum, with plans in place to stabilize performance [28][30] Question: Impact of nicotine replacement therapy on growth - The NRT business had a significant impact on overall growth, with expectations for less decline in the second half of the year [76][80] Question: Channel shifts and inventory management - Management discussed the impact of channel shifts, particularly towards e-commerce, and the need for effective inventory management across channels [86][90]

Group 1 - Haleon has appointed Carl Haney as Chief Research & Development Officer, effective August 1, 2025, following Franck Riot's departure after six years [1][2] - Carl Haney brings 13 years of experience from Estée Lauder and over 20 years from Procter & Gamble, focusing on innovation and R&D in consumer businesses [1][2] - The CEO of Haleon, Brian McNamara, expressed confidence in Haney's ability to drive transformative innovation and contribute to the company's new "Win as One" strategy [2][3] Group 2 - Franck Riot's contributions to Haleon were acknowledged, particularly in advancing the innovation agenda during the company's transition [3] - Carl Haney expressed enthusiasm about joining Haleon at a pivotal time, emphasizing the importance of R&D in achieving the company's goals of enhancing everyday health [3] - Haleon is positioned as a global leader in consumer health, with a diverse product portfolio across six major categories, including Oral Health and Pain Relief [4]