Interactive Investor

ii view: Haleon sales beat with the dividend up 75%

A consumer healthcare giant selling to markets including China and India. Buy, sell, or hold?

29th February 2024 14:21

Keith Bowman from interactive investor

Fourth-quarter and full-year results to 31 December  

  • Q4 organic sales up 6.7%
  • FY revenue up 4% to £11.3 billion
  • FY adjusted operating profit up 10% to £2.5 billion
  • Net debt down 14% to £8.5 billion
  • Final dividend up 75% to 4.2p per share
  • Total 2023 dividend payment of 6p per share 
  • New £500 million share buyback programme


  • Expects full-year 2024 organic revenue growth of between 4% to 6% 
  • Expects to grow dividend at least in line with adjusted earnings over the medium term

Chief executive Brian McNamara said: “I am very pleased with our results. We saw positive volume/mix in the full year, up slightly in Q4, demonstrating continued resilience in challenging markets. Importantly, we saw organic growth across all regions and categories, with healthy momentum in our Power and Local Growth Brands. 

“Within 18 months of our demerger, we reduced net debt by over £2 billion, bringing net debt/adjusted EBITDA down from circa 4x to 3x, reflecting both strong cash conversion and financial discipline, underpinning an increased dividend payout and share buyback. 

“In 2024, we expect the operating environment to remain challenging. We are confident however, that we are well positioned to deliver on both guidance for 2024 and over the medium term.”

ii round-up:

Consumer healthcare company Haleon (LSE:HLN) today detailed better than expected fourth-quarter sales with reduced net debt enabling it to launch a new £500 share buyback programme over 2024. 

Fourth-quarter organic sales for the maker of Sensodyne toothpaste and Panadol painkillers rose 6.7% year-over-year, beating City estimates for a gain of 5%. Group net debt fell 14% to £8.5 billion with Haleon, which was previously spun out of drug group GSK (LSE:GSK), upping its final dividend to 4.2p from 2.4p per share in 2022.

Shares for the FTSE 100 company rose 6% in UK trading having come into this latest news down around 4% over the last year. That’s similar to personal care and soap maker Unilever (LSE:ULVR) and in comparison to a 3% loss for the 100 index itself over the last year.

Haleon's product portfolio spans the five categories of Oral Health, Pain Relief, Respiratory Health, Digestive Health and Other, along with Vitamins, Minerals and Supplements (VMS).

Full-year 2023 revenues climbed 4% to £11.3 billion with 58% of its business either maintaining or gaining market share, pushing a 10% increase in adjusted operating profit to £2.5 billion. 

Emerging market sales, accounting for a third of overall revenues, climbed 14.5%, including double-digit growth in China and high single-digit growth in India. Developed-market sales rose 5%.

A focus on optimising its brand portfolio saw both its ChapStick and Lamisil brands sold over the year. 

Broker UBS reiterated it “buy” stance post the results flagging a fair value estimate of 410p per share. A first-quarter trading update is scheduled for 1 May.

ii view:

Headquartered in Weybridge, Surrey, Haleon operates in more than 170 markets. Its many brands include Biotene, Therflu, Voltaren and Centrum. Sales of Oral Health products generated its biggest slug of sales during 2023 at 28%, followed by Pain Relief at 24%, Digestive Health and other at 19%, Respiratory Health at 15% and VMS the balance of 14%.

For investors, variations in the cold and flu season can impact customer demand with related sales and against a tough year-over-year comparative expected to hinder overall group first-quarter 2024 sales. Costs broadly for businesses remain elevated, own brand competition from the supermarkets persists, while currency moves can have an impact. 

On the upside, a diversity of product categories and geographical regions allows positives in one area to counter challenges in another. A three-year £300 million productivity programme continues to be pursued, while strong cash flows give it financial flexibility with net debt being reduced by 14% year-over-year.  

For now, and despite ongoing risks, a likely progressive dividend payment and a consensus analyst estimate of fair value sat at over 360p provides grounds for longer-term hope.  


  • Diversity of product and geographical region
  • Targeting cost savings of up to £300 million over the next three years


  • Uncertain economic outlook
  • Exposure to currency movements

The average rating of stock market analysts:


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