Haleon plc

Haleon reported Q2 organic sales growth of 3.1%, versus 2.2% in Q1, and volume/mix of 1.4%. Operating margin improved by 120 basis points at constant currency, with gross margin up 140 basis points and a 40 basis point FX benefit. Brian McNamara said first-half A&P grew 3.2% and was roughly just below 21% of sales; Dawn Allen said first-half EPS grew 12%. Management held full-year organic sales growth guidance at 3% to 5% and said it expects a stronger second half, with volume/mix stepping up versus the first half and pricing broadly similar in H2. They also said they expect half 2 operating profit growth to be high single digit and strong EPS growth to continue.

Brian McNamara struck an upbeat but measured tone, saying he feels good about progress in North America and broader portfolio execution, but that there is still more work to do. He highlighted three main U.S. drivers: stronger execution through shelf resets and placements, innovation such as Clinical Repair and Centrum Age Defy, and e-commerce growing in the double digits at twice the market rate. He also emphasized the company’s strategy to reach more low-income consumers, especially in India and other emerging markets, and said Haleon will keep investing where it sees growth opportunities.

Dawn Allen said margin expansion came from efficiency and supply-chain productivity, not from cutting investment or pushing pricing above inflation. She cited 120 basis points of operating margin improvement at constant currency, 140 basis points of gross margin improvement, and 40 basis points of FX benefit, while noting A&P was 20.9% of sales and continued to rise in line with growth priorities. She said first-half EPS grew 12% and that H2 should still show gross margin improvement even as the business absorbs some Middle East costs, while also benefiting from operating model changes worth GBP 175 million to GBP 200 million in total, with about one-third expected this year.

Analysts focused on North America, margins, respiratory softness, China pricing, Latin America execution and the path to the company’s mid-term 4% to 6% growth goal. Management said North America is benefiting from shelf resets, innovation and e-commerce momentum, while respiratory should improve as cold and flu cycles off two weak years and Q4 seasonality kicks in. On China, Dawn Allen said growth was driven by more than 100% Douyin growth, stronger Voltaren presence and hospital-channel expansion, and that negative pricing reflected volume-based procurement and channel mix rather than a structural concern. On Latin America, Brian McNamara said a new regional leader quickly identified price-gap issues, including Sensodyne in Brazil, and he expects the Q2 improvement to be sustainable.