Haleon (HLN) H1 2025 earnings summary

Executive summary

• Organic revenue grew 3.2% year-over-year, led by EMEA & LatAm (+5.2%) and APAC (+5.0%), offsetting a decline in North America due to a weak US consumer environment and retailer inventory pressures.

• Oral Health outperformed with 7.6% organic revenue growth and market share gains, while pain relief and VMS saw mixed results in North America.

• Productivity initiatives and disciplined cost control drove 9.9% organic operating profit growth and margin expansion, enabling increased investment in A&P and R&D.

• New leadership and strategic initiatives in the US aim to address share losses and inventory issues, with expectations for improved performance in the back half and a return to growth in 2026.

• Completed acquisition of the remaining 12% equity in China OTC JV for £174m, providing full ownership and strategic flexibility.

Financial highlights

• H1 2025 revenue was £5.5bn, with 3.2% organic growth (2.4% price, 0.8% volume/mix); reported revenue down 3.8% due to FX and M&A impacts.

• Adjusted operating profit increased 9.9% organically to £1,243m; margin up 140bps to 22.7%.

• Adjusted diluted EPS grew 2.2% to 9.2p; reported diluted EPS was 8.9p, up 12.7%.

• Free cash flow rose to £734m, up £184m year-over-year (excluding divestments).

• Net debt reduced by £187m to £7,720m; net debt/adjusted EBITDA at 2.8x.

Outlook and guidance

• FY 2025 organic revenue growth expected around 3.5%, with high single-digit organic operating profit growth anticipated.

• Medium-term guidance (from 2026): 4–6% annual organic revenue growth, high single-digit adjusted operating profit growth, and 50–80bps annual margin expansion.

• Net M&A expected to reduce 2025 revenue and adjusted operating profit growth by ~2.0% and ~5.5%, respectively; FX headwinds projected to impact net revenue by ~4.0% and adjusted operating profit by ~6.5%.

• Dividend policy targets growth at least in line with adjusted earnings; interim dividend up 10% to 2.2p per share.

• No significant improvement anticipated in the US environment for the remainder of the year; medium-term confidence in 4%-6% organic sales growth remains.