Company Reports

Wide-moat Haleon reported first-quarter earnings that came in largely as we expected. Total sales of GBP 2.9 billion were down 2.2% year over year, with price and volume/mix contributing 5% and negative 2%, respectively. Unfavorable foreign exchange, which we estimate pulled back growth by a midsingle digit, proved to be a significant headwind but solid demand among key brands helped deliver decent results. After adjusting our near-term assumptions and accounting for time value of money impacts, we slightly tick up our fair value estimate to $8.80 per share from $8.70.

Haleon is one of the largest consumer healthcare companies in the world. Over the last few years, Haleon has achieved a more rationalized operation by divesting multiple non-strategic brands, slimming down its manufacturing footprint, and dialing back the number of warehouses and distribution centers. We appreciate the company’s efforts to optimize its business and believe it is well established to enjoy long-term industry trends, including an aging population, premiumization of consumer healthcare products, and growing emerging markets, that should fuel its top line.

Wide-moat Haleon reported on April 24 that its chief financial officer, Tobias Hestler, will be stepping down due to long-term health conditions and will be replaced by Dawn Allen. Allen is currently serving as the CFO of Tate & Lyle, a food and beverage products supplier, and has previously worked at Mars for over 20 years tackling various roles, including vice president and global CFO, global transformation at Mars Inc. Allen will join Haleon on Oct. 28, 2024, and we think she brings in decades of knowledge and relevant experience in the consumer industry to help the management team steer the company in the right direction.

Haleon is one of the largest consumer healthcare companies in the world. Over the last few years, Haleon has achieved a more rationalized operation by divesting multiple non-strategic brands, slimming down its manufacturing footprint, and dialing back the number of warehouses and distribution centers. We appreciate the company’s efforts to optimize its business and believe it is well established to enjoy long-term industry trends, including an aging population, premiumization of consumer healthcare products, and growing emerging markets, that should fuel its top line.

Wide-moat Haleon reported fourth-quarter earnings that were largely in line with our expectations. Total sales of GBP 2.8 billion were down 0.4% year over year, but organic growth remained resilient with 6.4% from price and 0.3% from volume. We maintain our fair value estimate of $8.70 per share, or GBX 347, as our slightly trimmed near-term assumptions were offset by time value of money impacts.

Haleon is one of the largest consumer healthcare companies in the world. Over the last few years, Haleon has achieved a more rationalized operation by divesting multiple non-strategic brands, slimming down its manufacturing footprint, and dialing back the number of warehouses and distribution centers. We appreciate the company’s efforts to optimize its business and believe it is well established to enjoy long-term industry trends, including an aging population, premiumization of consumer healthcare products, and growing emerging markets, that should fuel its top line.