Haleon Plc Q3 FY2024 earnings call

Revenue Growth: Organic revenue grew 6.1%, balanced between 3.3% price and 2.8% volume/mix. Power Brands grew 5.4%, developed markets 4%, and emerging markets 11% (China double-digit). Capital Allocation: Agreed to increase stake in China JV by 33%, completed GBP 500M share buyback, raised GBP 900M in bonds to refinance maturing debt. Geographic Performance: North America organic revenue was 4.8%, Europe, Middle East, Africa and Latin America saw 6.1% growth, and Asia Pacific had 8.2% growth with China double-digit.

Oral Health: Revenues grew 8.2% in the quarter, with 9.3% over 9 months. Key drivers include Sensodyne share gains, the launch of Clinical White, and parodontax's double-digit growth. VMS: 7.3% growth over 9 months, with Centrum showing mid-single digit growth and Caltrate achieving double-digit growth. Pain Relief: Returned to growth at 3.1%, with Advil benefiting from North America investment, Panadol declining but gaining share, and Voltaren flat. Respiratory Health: Up 9.1%, driven by Theraflu and Robitussin, with Otrivin performing well and allergy declining after a weak season. Digestive Health and Other: Up 5.9% after lapping the destock in North America last year. Geographic performance: North America organic revenue grew 4.8%, Europe, Middle East, Africa and Latin America saw 6.1% growth, and Asia Pacific had 8.2% growth with China showing double-digit growth.

Full year organic revenue growth expected to be between 4% to 6%, with organic profit growth in the high single digit. FX headwinds are expected to have a 4% adverse impact on revenue and a 6% to 6.5% impact on adjusted operating profit.

• Foreign exchange volatility. - Uncertainty in cold and flu season impact. - U.S. retailer behavior.

Q: On your outlook for 2024, should we interpret being well on track to deliver FY '24 guidance as comfortable with current consensus expectations and what are the key sources of uncertainty?

A: Tobias Hestler said they're confident, with key uncertainties including cold and flu season and U.S. retailer behavior.

Q: On VMS business slowdown, is deceleration entirely due to tough comparator for Centrum and expect sequential pickup in Q4?

A: Tobias Hestler said VMS was slightly lower in Q3 but expects pickup in Q4 as comparators are gone and they continue to gain share.

Q: On FX leverage effect, what accentuates fall-through in Q3?

A: Tobias Hestler explained Q3 had an outlier due to FX differences, weighted sales in September, and hyperinflation accounting impact.

Q: On China OTC, any change in visibility and inventory levels?

A: Tobias Hestler said they've been running the business operationally and tracking sell-in/sell-out performance.

Q: On Panadol performance, any systemic issues?

A: Tobias Hestler said Panadol is gaining and maintaining share, with normalization of market dynamics as an issue.

Q: On Eroxon launch, what's the outlook?

A: Tobias Hestler said it's too early to model, with retailers taking the product but it's a new category to build.

Q: On volume/mix balance and margin outlook, key drivers and margin expectations?

A: Tobias Hestler said volume step-up from various drivers and margin expected to follow year-to-date performance.